U.S. Department of Energy Office of Energy Efficiency and Renewable Energy U.S. Department of Energy Energy Efficiency and Renewable Energy
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Economic Impact of Renewable Energy in Pennsylvania

Summary

  • Estimates the economic impact of implementing a Renewable Portfolio Standard (RPS) requiring that renewable energy sources generate 10% of Pennsylvania's electricity by the year 2025, 65% of which is assumed to be wind power. The impact of the use of renewable energy is compared with the impact of a "business as usual" approach relying on the development of fossil fuel resources.
  • Findings:
    • The RPS portfolio has a significantly larger impact on jobs, income, and economic output when compared to the fossil fuel development scenario. This impact more than makes up for the small increase in electricity bills from investment in the RPS.
    • The cost of the RPS is 36% higher than the cost of the development of fossil fuels; however, "taken in context," the increase in electricity costs would be small per household, and more than recouped by the impact of the RPS on jobs, income and economic output.
    • Renewable energy resources may lower fuel prices and could therefore save money by decreasing the demand for fossil fuels.

Citation: Economic Impact of Renewable Energy in Pennsylvania (PDF 4.2 MB) Download Adobe Acrobat
Author(s): Prepared for the Heinz Endowments and Community Foundation of the Alleghenies by Black & Veatch
Report Date: March 2004

Project Size: 3,640 MW
Number of Turbines: n/a
Location: PA
Geographic Scope: Pennsylvania
Turbine Ownership: n/a
Type of Study: Prospective
Timeframe of Data: 20 years (2006-2025)

Model: RIMS II Regional input-output model developed by the US Bureau of Economic Analysis

Data Sources:

Assumptions: 1% of energy consumption would be met by new renewable energy generation each year until the 10% goal is reached. Only small amount of costs of manufacturing would stay in Pennsylvania, since there are no wind turbine manufacturing facilities there, but there are a few component suppliers.

Special Considerations: Study estimates the economic impact of using renewable energy sources to generate 10% of Pennsylvania's electricity by the year 2025, 65% of which is assumed to be wind power. The impact of the use of renewable energy is compared with the impact of a "business as usual" approach relying on the development of fossil fuel resources; however, only the impacts of wind power are shown here. Dollars deflated to 1999 dollars. Construction and Operations jobs anda income are shown over the 20-year period.

Jobs Construction Operations (jobs/year) Total
Direct      
Indirect      
Induced      
Total 28,523 30,431 58,954
Jobs/MW 7.84 0.6 16.19

 

Income Construction Operations Total
Direct      
Indirect      
Induced      
Total $1,088,411,368 $1,115,598,406 $2,204,009,774

 

Taxes Direct Indirect Total
Local/State      
Income      
Property      
Sales      
Total      

Developer Incentives:

Lease Payments:

Other Remuneration:

Conclusion: Using renewable energy to provide electricity for Pennsylvania creates a significantly larger impact on the economy than does relying on fossil fuels. The additional income earned by Pennsylvanians working in the renewable energy industry more than makes up for the increase in cost required to invest in renewable energy. Additionally, renewable resources could potentially save consumers millions of dollars per year.