Poster #97 - Who Benefits from Renewable Energy Projects? Examining Power Purchase Agreement Revenue Flows in Michigan and Ohio

• In Event: Saturday Poster Luncheon

Abstract

Wind and solar energy   projects provide various economic benefits to local communities. This research investigates the economic impact of utility-scale generation from wind and solar projects in Michigan and Ohio, focusing on the flow of revenue generated from power purchase agreements (PPAs). While such projects provide significant benefits to local communities through landowner payments and property tax revenues, electricity sales revenue through PPAs often exit the local and state economies. PPAs are a primary revenue stream for renewable energy projects yet they are complex and confidential, often concealing PPAs impact to the public. My analysis quantifies the PPA revenue flows across 28 solar and 37 wind projects in Michigan, and 26 solar and 21 wind projects in Ohio, examining project capacity, developer and owner origins, and PPA pricing. 

The findings reveal that a significant proportion of developers and owners are out-of-state entities in both states, leading to an outward revenue flow. Specifically, 43 percent of Michigan wind project PPA revenues and 56 percent of Michigan solar project PPA revenues leave the state, while Ohio shows even greater external ownership (96 percent of wind and 94 percent of solar capacity). This demonstrates an opportunity to increase the economic benefits of host states and communities who bear most of the impacts of renewable energy projects. Increased transparency in project ownership and PPAs, state-level PPA revenue analysis, and prioritization of in-state ownership of renewable energy projects are recommended to retain PPA revenues and securing broad, long-term support for renewable energy development.

Author

• Jacklyn Alsbro, University of Wisconsin-Madison
  Presenting Author