8 Practical Local Energy Policies To Boost The Economy

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Originally published on the Institute for Local Self-Reliance website

The economy has stalled and so has the war on climate change. But a new report from the Institute for Local Self-Reliance shows that dozens of cities are boosting their local economies while dramatically reducing greenhouse gases.

City Power Play:  8 Practical Local Energy Policies to Boost the Economy illustrates how Chattanooga, TN, is adding over $1 billion to the local economy in the next decade by implementing one of the most advanced smart grids while delivering the fastest internet service in the country.  Sonoma County, CA, has created nearly 800 local jobs retrofitting over 2,000 properties for energy savings with city financing. Babylon, NY, repurposed a solid waste fund to finance retrofits for 2% of the city’s homes, saving residents an average of $1,300 a year on their energy bills at minimal cost to the city.

What’s remarkable is that none of the examples relied on federal or state financial aid, but instead on the community’s own resources.  And the communities featured in the report just scratch the surface of the many cities, counties, and municipalities that have tried and tested these options.

Eight local policies are featured in the report and the case studies of each policy show how these local tools have been leveraged for economic advantage, from more rigorous building codes to solar mandates and easier permitting to the use of a wide array of financing tools to spur renewable energy and energy efficiency.  The full list (far from exhaustive) includes:

  • Municipal electric utilities
  • Community choice aggregation or “community utilities”
  • Building energy codes
  • Building energy use disclosure
  • Local tax authority
  • Solar mandates for new homes
  • Improved solar permitting
  • Local energy financing

The policies aren’t tied to a political ideology, but a practical and local one.  Cities have identified where they have untapped resources and deployed them to generate jobs and keep more of their energy dollars in the economy.

The report also candidly admits that not every policy can be used everywhere.  In a brief chapter on the “Limits of Local Authority,” a map illustrates how variation in state law gives some cities relative local superpowers compared to others.  Cities in states with so-called Dillon’s Rule are largely confined to powers expressly granted by their state government.  Cities with home rule generally have more authority.

state limits on local authority


Despite the variation in local power, the bigger lesson is that any city can likely use at least one local policy (from the report or otherwise) to increase their local energy dollar and boost their economy.

The report is freely available from ILSR’s Democratic Energy program: http://www.ilsr.org/initiatives/energy/

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John Farrell

John directs the Democratic Energy program at ILSR and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. His seminal paper, Democratizing the Electricity System, describes how to blast the roadblocks to distributed renewable energy generation, and how such small-scale renewable energy projects are the key to the biggest strides in renewable energy development.   Farrell also authored the landmark report Energy Self-Reliant States, which serves as the definitive energy atlas for the United States, detailing the state-by-state renewable electricity generation potential. Farrell regularly provides discussion and analysis of distributed renewable energy policy on his blog, Energy Self-Reliant States (energyselfreliantstates.org), and articles are regularly syndicated on Grist and Renewable Energy World.   John Farrell can also be found on Twitter @johnffarrell, or at jfarrell@ilsr.org.

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