How Vermont can fuel our economic recovery with local renewable energy
Opinion Editorial by Chad Farrell, CEO and Founder of Encore Renewable Energy
The holiday festivities of 2019 seem like a lifetime ago. As the decade came to a close, we at Encore Renewable Energy discussed the past ten years in the solar industry and what the next ten years may look like. One of us brought up an interesting observation: the modern solar industry has not existed during an economic recession or crisis. How would we fare if/when one were to occur during the next decade? At the time, I never would have thought we would be learning the answer to that question in real time a mere three months later as a result of the COVID-19 pandemic and subsequent economic crisis.
However, once our business stabilized and we were able to begin to chart a path forward in a less chaotic way, all of us at Encore realized something: Encore and much of the modern solar industry are direct products of the economic recovery of the most recent economic crisis of 2008-09. And then we asked ourselves, why can’t renewables again be a pillar of economy recovery and job creation? And why can’t they be an even larger pillar than they were before? Because as we face the current challenges of recovering from the COVID-19 induced recession, we cannot forget the impending challenges of our next crisis, climate change, a crisis from which no one can self isolate.
A recovery with renewables as a foundation looks different today than it did 10 years ago. Unlike 2009, we are not creating an industry nearly from scratch: we have had successes, identified challenges, and created thousands of jobs in Vermont. However unlike 2009, we currently lack federal action and leadership on COVID-19, economic recovery, and climate related issues. Therefore, local leadership is necessary in this time of federal inaction.
In Vermont, it’s critical that we lead by example and push for 100% renewable energy by 2030. Of greater significance, we also need to more than double our in-state renewable generation requirements and make massive investments in energy storage and control technologies. We need to continue to harness financial innovation, and secure lowest-cost sources of capital so we can be as competitive as possible. And we need to stop being the only state in New England to consider Hydro-Québec as a renewable resource and discontinue the practice of pairing the selling of locally-generated RECs with the purchase of cheap out-of-state RECs to meet renewable energy standard requirements. Finally, we need to rapidly pass 21st century energy legislation that embraces the full social, environmental and economic potential of the energy transition, while also reducing counterproductive and outdated regulatory red tape that is not present in bordering states so that meaningful investments can be made and made quickly. Doing all of this will create good paying jobs for Vermonters as we move out of this current crisis and proactively address climate change.
Sadly, the current energy landscape in Vermont is not pretty. Despite early successes in the renewable energy industry, Vermont is falling behind our neighbors. Take for example the 975 MW of net metered solar generation that has been proposed in Maine in less than one year compared to 20 MW during the same time period in Vermont. For context, Vermont has around 350 MW of solar installed to-date. Maine has 91 MW. However, Maine’s new state policy is pushing farther and faster than Vermont’s (with similar smaller state resources). As a direct result, over the last few years we have seen Vermont solar companies look at opportunities for growth out-of-state rather than continuing to build and support Vermont’s renewable energy future.
While the Vermont legislature should be lauded for recently passing the Global Warming Solutions Act which would require the state to reduce greenhouse gas pollution to 26% below 2005 levels by 2025 and 80% below 1990 levels by 2050, we are not currently on track to meet these these goals unless we make substantial changes to our energy policy. The current economic recession underlies the urgency of these policies as investments in locally-generated sources of electricity will drive our local recovery with new jobs, a more reliable electric grid, tax revenue and all of the secondary and tertiary economic benefits that come along with bringing new investment dollars into Vermont. A recent study found that getting 20% of Vermont’s electricity from local solar would create $8 billion in net benefits for Vermonters. And consider what our communities could do with the $1.5 billion that we currently send out of state every year for our energy requirements.
Another example of the promise of a future powered by clean sources of electricity is a recent study from the University of California, Berkeley that found that transitioning to 90% renewable energy by 2035 would create 500,000 new jobs per year and result in $1.7 trillion of new investment opportunity, while avoiding $1.2 trillion in health and environmental costs. And it’s not like we are starting from scratch, as the energy transition is already well underway. At $68 billion, the market value of Iberdrola, a Spanish utility and renewable energy asset owner, now eclipses all but the top five oil majors globally, with the 5th (BP) currently in its sights.
The impacts of our current recession, growing inequalities and the increasing threat of climate change clearly illustrate the critical need for a transition to a lower-carbon economy that is accessible to all. Now is the time to rebuild better while working to address the climate crisis head-on. There are currently nearly 19,000 hard-working folks in Vermont’s clean energy sector, not including the many energy technology and control start-ups being captained by younger entrepreneurs looking for a reason to stay in Vermont. This economic growth opportunity is jeopardized by backward looking, inconsistent and temporary policies that favor short term interests over long term needs. The distributed, renewable energy economy represents the future workforce in Vermont and deserves the same degree of consideration as those working in older, more mature and more well-funded incumbent industries as we make decisions about our future energy investments.
The COVID-19 pandemic has disrupted our lives in immeasurable and lasting ways, but now more than ever we need to do better. Now is the time to build a reliable carbon-free grid with solar and wind power paired with robust energy storage and control technologies. Now is the time to electrify our thermal and transportation sectors. And now is the time for action, as we need to do all of the above in a very short amount of time to stave off the worst impacts of climate change that will be experienced by our kids and their kids. Fortunately, the tools already exist to address climate change, and we now have the data to prove that it can be done without raising electric rates. It’s why Vermonters must pursue the long-term, lower costs of renewables as well as the socio-economic benefits that the energy transition will provide to states that rapidly and efficiently embrace the clean energy future.
Let’s do what Vermonters do best and roll up our sleeves and get to work building a cleaner, better future for all.