Why the solar industry is counting Ohio’s newest energy law as a win

In other words, multiple businesses could form a shared ​“self-power” system with equipment for electricity generation or battery storage on adjacent land or on premises controlled by one or more of them. Such a system could include numerous generation or storage facilities, allowing a cluster of data centers, factories, or other large energy users to combine multiple behind-the-meter resources, whether they be natural gas, solar, batteries, or small nuclear when it becomes available.

The ability to combine resources means customers wouldn’t necessarily need lots of land to add renewable energy, said Benson. ​“If you want the most power quickly and cleanly, you can use rooftops and parking lots and build out a lot of small-scale generation.”

The law also reduces the overall tax burden for new electricity production. Local governments may collect less revenue but still welcome the jobs and other spending that come with new energy investments. And less stringent requirements might even benefit some communities when new power generation is sited, Borchers suggested.

Ohio’s current tangible personal property tax rates have been so high that companies have often used ​“payments in lieu of taxes,” also known as PILOT programs, to avoid getting walloped by huge tax bills as soon as energy production starts. But counties face somewhat strict requirements for how they must allocate PILOT payments. Developers that take advantage of the lower tax rates available under HB 15 may have more financial flexibility to be able to fund some projects that local governments want most, such as a new fire station or community center, Borchers said.

Taken together, the provisions in HB 15 promise to make it easier to build more solar in the state, industry representatives say.

The governor and legislature saw ​“the urgent need to expand energy generation as Ohio confronts rapidly increasing demand and the threat of escalating costs and supply shortages,” said Will Hinman, executive director for the Utility Scale Solar Energy Coalition of Ohio. ​“House Bill 15 is a critical step towards addressing these challenges by reducing barriers to energy development — including utility-scale solar projects.”

Ohio is still not a level playing field for clean energy

The law still requires projects to meet multiple criteria to benefit from its provisions. For example, power-generating facilities and transmission lines exceeding certain thresholds may need approval from the Ohio Power Siting Board. The state’s director of development must approve local governments’ designations of priority investment areas. And self-power systems have to be independent of the main power grid.

The biggest downside is that the new law left in place a 2021 statute, Senate Bill 52, which requires utility-scale renewable energy developments to get local approval, said Molly Bryden, a climate and sustainability researcher with think tank Policy Matters Ohio.

Under that earlier law, 34 of Ohio’s 88 counties have banned new solar generation in all or part of their territories. Even where the local law doesn’t bar a new project, local officials can still block projects before a developer even seeks a permit from the Ohio Power Siting Board. A county representative and a township representative also get to vote with state siting board members on whether facilities get a permit, even for some projects that were in the grid operator’s queue before the 2021 law.

Another law took effect in early 2023, letting local governments limit small solar and wind projects that connect to the grid but don’t otherwise fall within the scope of the 2021 law.

Requirements of the 2021 and 2023 laws don’t apply to generation fueled by natural gas, coal, or nuclear power. And Ohio’s high court has ruled local governments can’t ban or regulate gas wells and related infrastructure or even enforce broader zoning laws that would prevent such development.

Lawmakers also cut out provisions from an earlier version of HB 15 that would have allowed community solar development. Community solar lets residential customers save money by sharing the electricity from a local solar array, which doesn’t have to be on their own property.

“There’s still a real need for permitting reform,” Bryden said.