Renewable Energy Policy

July 25, 2011

Increasing numbers of U.S. states are implementing energy policy standards and allocating funding to foster the deployment of renewable energy projects.  In August of 2007, the passing of Ohio’s Alternative Energy Portfolio Standards (SB 221) set in motion a series of events that are helping spur utility scale renewable energy development in Ohio.  The Advanced Energy Portfolio Standard requires that 25% of all kilowatt-hours produced by investor owned electric distribution companies must be generated from alternative energy resources by the year 2025.  According to the Ohio Energy Resource Division, “Ohio’s renewable energy standard is the third most aggressive policy in the U.S. and translates into at least 6,000 Megawatts (MW) of new wind and solar capacity – enough to power 1.8 million homes.” 

In order to compliment the Alternative Energy Portfolio Standards set forth in SB 221, Ohio has passed SB 232 in June of 2010 to establish a tax treatment that further encourages the development and implementation of Ohio’s renewable energy projects.

In July 2011 Governor John Kasich signed into law Executive Budget - FY2012-13 that included a two-year extension of last session’s Senate Bill 232. Under the bill, qualifying energy projects are exempt from real and personal property taxation, instead requiring project owners to make payments in lieu of taxes based on generating nameplate capacity.  With the extension, qualifying energy projects under SB 232 must be under construction or filed with the Ohio Power Siting Board by January 1, 2014, and placed in service by January 1, 2015 to qualify for the tax treatment.

In response to the ongoing state and federal policies guiding the development of renewable energy, an OSU Fact Sheet series has been developed to track and summarize the evolving legislation.  To view the Renewable Energy Policy Series visit Ohioline. A factsheet on SB 221 is available for viewing and a factsheet on SB 232 is currently in the final phases of peer review.  Additional topics to expect in the future include Ohio Power Siting Board, renewable energy impacts on current agricultural usage values, Ohio special energy improvement districts, and necessary steps to energy transmission interconnection.