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Businesses demand renewable energy tax reform in Ohio

Ohio has 7MW of installed wind capacity despite good transmission links and local manufacturing facilities

A coalition of 100 businesses in Ohio has launched a three-week campaign to reform tax laws for renewable energy projects.

Wind and Solar Jobs for Ohio, as the group is called, wants to see Ohio lawmakers approving two pending bills before the summer recess, which would set taxes for wind and solar developments more in line with surrounding states.

The group says at least 1,000 jobs are at stake in a state that so far has only 7 megawatts of wind farms generating renewable energy.

Ohio has the nation’s fifth largest wind energy manufacturing industry, but the campaigners say investment in renewable energy in the state is being “crippled” by the system.

Tax rules

Under the current rules in the state, renewable energy developments are taxed under the tangible personal property tax system which means a tax burden of $40,000 per megawatt of capacity, up to 10 times that of neighboring states.

Ohio Senate Bill 232 and House Bill 464 aims to set a tax at a fixed rate of $7,000 per megawatt of capacity.

Without the changes, the campaigners fear that Ohio could miss out on federal tax credits available in 2010, as developers choose to locate renewable energy projects elsewhere.

The group highlighted seven planned wind developments that Ohio could lose, costing nearly 1,000 immediate construction and operations jobs along with $9.3 million in annual lease payments to farmers and $7.3 million in tax revenues for rural schools and communities.

Hampering

Brad Lystra, manager of economic development partnerships for the American Wind Energy Association, said: “Ohio has good transmission systems and climate for wind power development. But Ohio’s unfavorable tax structure is severely hampering the state’s strategy to excel in alternative energy solutions.

We would be foolhardy to keep our higher taxes and wind up taxing nothing” - John Hohn, Hardin County Chamber & Business Alliance

The US Department of Energy believes Ohio has the potential to generate up to 66,000MW of wind power in just its western and northwestern areas, with additional capacity possible offshore in Lake Erie.

The State’s 7MW of installed wind capacity compares to 1,547MW operating in Illinois, 1,036MW in Indiana and 748MW in Pennsylvania.

Three wind projects were given permits earlier this year in Ohio (see this BrighterEnergy.org story), while four more are in the pipeline, the campaigner said.

John Hohn, vice president of economic development for the Hardin County Chamber & Business Alliance, said changes in renewable energy taxation would mean a bright economic future for his County.

Mr Hohn said: “We would be foolhardy to keep our higher taxes and wind up taxing nothing. We have to make changes to stay on track with the competition – our neighboring states, the entire country, and the world. Wind power developers are in Ohio, they want to be in Ohio and we can keep them and attract them here, but we have to act immediately.”