Rural clean energy development is a key economic driver across the Midwest, according to a report released Thursday by the Natural Resources Defense Council (NRDC). While the region still relies heavily on coal and natural gas, a continued rural focus may be the key to unlocking the region's clean energy potential, the report said.

There has been a lot of rural development in the states covered by the report, propelled by falling wind and solar prices. Even coal-dominant states like Indiana are finding that adding renewable resources costs less than maintaining existing coal plants.

Approximately 5 GW of new renewables were added across nonmetropolitan areas of 12 Midwest states between 2016 and 2017, compared to about 1.7 GW of capacity added in urban areas, according to the report. NRDC's analysis focused on Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin. 

Development in the region is not slowing down either. Last week Capital Dynamics announced an agreement with power company Tenaska to develop 2,000 MW of solar across half the states listed in the report. And Illinois has 600 MW under construction with another 1.2 GW planned, which will more than double the state's current rural renewables capacity of 1.6 GW.

All this development is a key engine for job growth in the region.

Over a quarter million people in those rural areas are employed by clean energy, renewables or energy efficiency jobs, making up 2.7% of total employment in 2017 and representing approximately 6.1% of employment growth from 2015 to 2016.

Jobs generated by those clean resources made up a larger percentage of the workforce in rural areas than fossil fuels in 10 of the 12 states studied.

The gap is especially large in Michigan and Wisconsin, with clean energy jobs making up 4.2% and 3.3% of total employment in rural areas, compared to 0.5% and 0.2% of rural jobs supplied by the fossil fuel industry, respectively.

"One of the things that was particularly surprising to me was the comparison between growth in clean energy jobs and the growth in total jobs as a whole," Arjun Krishnaswami, one of the authors of the report, told Utility Dive.

"In many of these states, you see very small growth in many of these rural areas in terms of total jobs … looking at those in comparison with the growth in the number of clean energy jobs, it's a stark contrast and it shows that we should continue taking advantage of these opportunities to build a clean energy economy and a workforce that is based in the foundation of clean energy," he said

Rural renewable energy growth

Rural areas, unsurprisingly, have more available land necessary for renewable energy development than metropolitan spaces. As wind and solar prices drop, those regions have become more of a target for wind and solar projects, with 99% of U.S. wind capacity located in rural areas.

The rural Midwest gained 2.2 GW of wind capacity in 2017, with Kansas leading the region in rural wind and solar development last year, adding 660 MW total. Minnesota and Missouri followed, the report found, adding 319 and 306 MW of wind and solar to their rural regions, respectively.

Siting these projects can sometimes be a point of contention between developers and residents: In September, RES Americas canceled a 600 MW wind project in Indiana after residents in the proposed county opposed the development. And in November, an Iowa Court of Appeals ruled developers had to take down three wind turbines after nearby landowners challenged the legality of their permits, only the second time a U.S. court has forced wind turbines to be torn down.

Despite some clashes, projects often "produce direct economic benefits" to the surrounding area including increased tax revenues, land lease revenues, infrastructure funding and employment.​ Annually, wind farms provide $245 million in lease payments alone to farmers whose land hosts the turbines, according to the report.

Community solar allows a similar reciprocity: landowners are paid to site projects and those projects can provide solar power to multiple households. Community solar also allow broader solar access for low-to-middle income customers who are unable to site solar on their own roofs.

Efficiency also a driver

The study also addresses the importance of energy efficiency, noting jobs "related to the production, distribution, and installation of efficient appliances, building materials, and other efficiency services" make up over 116,000 of the almost 160,000 clean energy jobs in the rural parts of the Midwest.

Energy efficiency is particularly important to the farming sector, the report notes, because of how much electricity farm operations need. In July, a report found that rural households pay approximately 40% more of their paychecks on electric and heating bills than urban households, largely based on lacking energy efficiency programs. 

Although the clean energy sector is growing, "it's very clear that there is a ways to go, especially in energy efficiency," which is especially important to rural energy development and affordability, said Krishnaswami.

"Rural energy burden is much higher than average throughout this country, and for low income people living in rural regions they pay three times as much of their income on energy as the average across the country," he said.

"So there's a huge potential to bring more energy efficiency to rural areas and we should be taking advantage of that, one, because it will help reduce bills for many Americans, but, two, because it can bring this economic impact of jobs and creating local economies that work for people."

The report notes that federal energy efficiency programs such as the Weatherization Assistance Program and the Low Income Home Energy Assistance Program, as well as "codes and standards for building efficiency" have all been instrumental in helping expand rural clean energy development.

Federal rollbacks put funding for some of these programs at risk, but state-level energy policy is becoming the main driver of clean energy growth, with even more development expected in the Midwest after the results of the mid-term elections last month.

State drivers

Illinois recently elected Democratic Gov. J.B. Pritzker​, who ran his campaign in part on doubling the state's clean energy mandate to reach 100% renewables by 2050. The newly elected governor joins seven other governor seats that flipped blue in the midterm elections last month, including in Kansas, Michigan and Wisconsin. 

Some energy observers say the shift marks a positive sign for the future of clean energy in those states. However, observers also note that while many Democratic gubernatorial candidates ran on strong clean energy policy, renewables development has become largely bipartisan at the state level.

"Clean energy should not in our minds be a partisan issue, it should be something that legislators of all types should support in order to build this clean energy economy for their constituents," said Krishnaswami. "Our hope is, and I think this is true to a large extent, that people recognize that clean energy is bringing benefits to their communities and we hope that [state] legislators act accordingly to make sure that economy is growing and to do so in a way that works for everybody."

However, he cautions the federal climate on clean energy is more divided, and some policies that previously enabled clean energy growth across the fossil-fuel reliant region face uncertain futures under the Trump administration.

"You can envision a scenario where we had strong federal climate policy and what that would do for the power sectors to incentivize that growth to accelerate these benefits to rural communities more quickly," he said. "So that's a huge and probably obvious piece of the puzzle."