Quick Hit Ellyn Fortino Monday April 13th, 2015, 6:11pm

Despite Initial Surge, Local & Federal Policies Tamp Out Renewable Energy Growth In Illinois

A recent report by the Environmental Law and Policy Center (ELPC) shows that over 400 Illinois companies are now tapped into the state’s clean energy supply chain for solar and wind projects.

The local solar industry supply chain includes 237 Illinois companies, including those providing installation, electrical and consulting services. The other 170 Illinois companies are working in the state’s wind industry supply chain, comprised of manufacturers and diagnostic software designers as well as engineering, legal, financial and consulting firms. Collectively, the 400 plus Illinois wind and solar companies employ more than 20,000 workers, according to the report.

By comparison, there were 152 wind and 96 solar companies tied to the Illinois clean energy supply chain in 2011, according to a previous ELPC analysis.

“When a wind turbine goes up in rural Illinois, it doesn’t sprout from the ground,” said ELPC’s Executive Director Howard Learner. “Every piece of that turbine and that wind machine … (is) manufactured by skilled laborers and manufacturing workers” at firms located in Cicero, Elgin and Rockford, to name a few places.

“When the turbine’s sited,” Learner said, “it’s done by engineers and project managers in Chicago and Springfield and Palatine. And the project financing is often done by investment professionals right here in Chicago.”

The Chicago area includes 13 corporate headquarters of major wind companies and has the biggest overall concentration of clean energy firms. Rockford and the East St. Louis area are also home to large clusters of wind and solar supply chain firms. The average Illinois company working in the state’s clean energy supply chain has 26 employees.

Chicago alone includes about 70 solar and 50 wind companies, the report showed. 

Elise Houren, manager of government relations with the Chicagoland Chamber of Commerce, said a strong renewable energy sector makes the Chicago region an appealing destination particularly for sustainable businesses.

“Energy is clearly an important part of the infrastructure that businesses look to when deciding where they want to open up shop,” she said. “And we know that many businesses have embraced sustainability goals that place a priority on renewable energy. We think that Chicagoland is a destination for these companies that care about sustainability, because we have tremendous potential to increase the amount of renewable energy we produce, and we have the companies and workforce to bring more solar power businesses to the Chicagoland area and to develop more wind energy using parts manufactured here in Chicagoland.”

Illinois has become a leader when it comes to wind and solar component manufacturing, according to the report, thanks in part to supportive state policies; an established manufacturing base and trained workforce; a central location with good access to transportation, electricity transmission and logistics; and higher education and research institutions that place a focus on the renewable energy industry.

But “mixed policy signals” coming from Washington, D.C. and Springfield have also stymied renewable energy investments in Illinois over recent years, Learner said.

One example, according to Learner is seen in the state’s Renewable Portfolio Standard (RPS), a regulation passed in 2007 that requires the state to get at least 25 percent of its electricity from naturally renewable sources by 2025. The plan initially boosted wind power development in Illinois.

But wind and other renewable energy investments have since slowed in Illinois with the rise of municipal aggregation, which occurred after the RPS was created.

Community municipal aggregation allows city and county governments to purchase electricity on behalf of residential and small business customers, and negotiate a price with an alternative electric supplier rather than the utility that serves the area. As a result of municipal aggregation, most customers in the state get their power from alternative suppliers rather than through the Illinois Power Agency, which was supposed to be the primary vehicle to procure, and therefore build, renewable energy annually as part of the RPS.

Learner said the state legislature could address this problem by tweaking the RPS policy. The Illinois Clean Jobs Coalition, of which ELPC is a member, is pushing recently-introduced legislation that would restructure the RPS.

At the federal level, Learner said Congress needs to renew the wind Production Tax Credit, which expired in January. This is not the first time Congress has let the tax credit, which has accelerated wind power development, lapse.

“The stop-start of the federal Production Tax Credit for wind energy has hampered moving forward,” Learner stressed. “Congress needs to step up its game and get something done. This is a policy that works. It’s good for jobs, good for economic growth, good for the environment, and we need to move that forward.”

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