On Wednesday, Forward Analytics released an economic impact study called “Capturing the Sun” regarding utility-scale solar farms in Wisconsin. The study concludes that the 19 solar farms currently being constructed or pending at the Public Service Commission of Wisconsin would generate $195 million in economic activity in the rural Wisconsin communities where the projects are located.
This much-needed economic boost to our rural communities, however, will only happen if local workers are used. If out-of-state workers are used, the economic benefit drops by 62%. That is a potential loss of $120 million.
While economic impact studies are common, Forward Analytics isolated the workforce variable. This was done because most of the materials used for the solar farms cannot be sourced locally. Wisconsin does not have any solar panel manufacturing facilities. Solar farms require very few workers for long-term operation and maintenance once constructed. With the materials being sourced elsewhere and few workers needed for operation, the vast majority of the economic benefit from a solar farm comes from worker wages during construction.
The study concludes a solar farm’s economic impact depends on the workforce’s composition (i.e., local versus out-of-state), meaning local workers generate significantly greater economic impact than out-of-state workers. Wisconsin workers spend more of their wages locally, which is why the economic impact to the local community is much higher.
Historically, utility-scale electric generation plants were constructed by public utilities that often use Wisconsin contractors and workers to build the plants. Solar farms are different because most of the solar farms are being built by out-of-state, third-party developers and then sold to public utilities. These developers do not have a history with Wisconsin contractors or workers, and, as a result, the first utility-scale solar farms were constructed using primarily out-of-state contractors and workers.
The 19 solar farms planned for Wisconsin will cost in excess of $2.6 billion. This is a much-needed capital investment as aging electric generation plants are retired, but it is Wisconsin residents that will pay for the projects through their utility bills. Since Wisconsin is paying for the new infrastructure, it should be Wisconsin contractors and workers who build it.
The full study is available here.