Powering Rural Economic Development with Renewables
Article courtesy of RMI.
By Katie Siegnerm, Mark Dyson, & Gabriella Tosado
Despite serving only 13 percent of US electricity load, electric cooperatives loom large in conversations about the US energy system’s past, present, and future. The initial vision for nonprofit electric co-ops dates back to the New Deal, when the Rural Electrification Act of 1936 authorized the creation of co-ops to serve rural areas bypassed by the larger electricity providers of the time. Today, 832 distribution co-ops and 63 generation and transmission (G&T) co-ops still serve the majority of rural America, including more than 90 percent of persistent poverty counties (counties with at least 20 percent of their population living in poverty).
As the energy transition ramps up, bringing the benefits of low-cost renewable energy to more and more places, electric co-ops the opportunity to replace their aging coal fleets with wind and solar projects. This can lower electric bills and drive rural economic development in areas that need it.
“If You Know One Co-op…”
Through several years of engagements with co-op leadership and stakeholders, we have learned that electric co-ops face unique and varied constraints as well as incentives when it comes to decarbonizing their generation mix. Co-ops have lagged other utilities in retiring their coal plants, although a spate of coal retirement announcements and emissions reduction goals set by several prominent G&Ts in the past year indicates they may be closing that gap. A combination of rapidly falling costs for renewable energy and battery storage technologies, state climate policy, and member demand for carbon-free electricity is driving that shift.
Nonetheless, a number of G&T co-ops are continuing to operate aging and increasingly uneconomic coal plants without plans for their retirement. This can be due to the nature of some co-op financing structures as well as regulatory and governance models that muddy the economic signal for retirement. For example, coal plants may have undepreciated value that the G&Ts are seeking to recover, and in some cases, they act as the collateral on G&T debt obligations, making their retirement a risk to lenders.
What’s more, co-ops’ nonprofit status limits their ability to take advantage of existing tax credits for wind and solar development. And G&Ts with a history of asset ownership may be reluctant to shift toward greater shares of third-party-owned generation (e.g., wind and solar projects contracted for through power purchase agreements).
In short, co-ops’ situations and needs are as varied as the geographies they serve — as the saying goes, “if you know one co-op, then you know one co-op.” As such, there hasn’t yet been a silver bullet approach that can overcome the barriers to full co-op participation in the clean energy transition.
Federal Policy Can Support and Speed the Co-op Energy Transition
Policy intervention can smooth the path forward for the cooperative energy transition by allowing G&Ts to retire uneconomic coal and replace their fossil generation with clean energy alternatives. This could spur rural economic development and clean tech asset ownership opportunities while at the same time lowering member electricity bills.
Today, federal policymakers have the opportunity to facilitate a coal-to-clean transition among electric co-ops through investment that incents co-ops to retire their coal assets and replace them with renewable generation. The White House includes funding for transitioning rural co-ops to clean energy in its American Jobs Plan, and additional proposals outline incentives that would be available to co-ops for each kW of coal that they replace with clean energy. These proposals also provide direct support to impacted coal plant and mine communities.
The replacement of rural cooperative coal with wind and solar would yield economic development benefits stemming from the construction and operation of those projects, largely in rural communities. Our analysis shows that the tax revenues, land lease payments, and wages generated by these projects, in addition to their low-cost electricity, have the potential to more than offset any cost of the policy.
Planting Seeds of Opportunity in Co-op Territory
To quantify the benefits that might accrue to rural communities from a policy that facilitates co-op coal retirement and re-investment in clean energy, we developed estimates for the direct local revenues that new wind and solar projects could produce in the states where the coal was retired based on our Seeds of Opportunity report methodology. The analysis uses the capacity expansion model from UC-Berkeley and GridLab’s 2035 Report to estimate the share of wind and solar projects that would be built in a particular state, as well as the report’s state-level capacity factors for wind and solar.
While we assumed full generation replacement with wind and solar, the economic development benefits could vary based on the actual choices co-ops make upon retiring their coal fleets. For instance, the addition of battery storage, transmission assets, energy efficiency projects, and other clean energy technologies that might be needed could yield additional revenue streams and energy bill savings over and above what is captured here.
The coal plants captured in this analysis are at least partially owned by co-ops and extend across 23 states and 33 co-op territories. Arkansas and North Dakota, the two states with the most coal plants (five each) that might take advantage of federal policy incentives to retire, could see $4.8 billion and $4.2 billion, respectively, from replacing their co-op coal generation with new wind and solar projects.
In Ohio, retiring the 1,265 MW Cardinal coal plant could spur over 4,000 MW of wind and solar project development, contributing nearly $2 billion in revenues to the state’s rural economy. Florida’s even larger Seminole coal plant, should it utilize federal policy incentives to retire, could pave the way for 4,400 MW of solar projects that would generate $2.3 billion in economic development to rural parts of the state.
The map and table below illustrate the location of all coal plants with a share of co-op ownership and the new wind and solar capacity that would be needed to offset each plant’s 2019 annual generation. We then show the economic development that these projects would produce over the course of their lifetimes.
Click image for full table as PDF.
We recognize that coal plant retirements raise questions about maintaining the reliability of the local electric grid. The wind and solar replacement capacity modeled here indicates what would be needed to fully replace the annual generation of the retiring coal, but of course, the grid reliability considerations are more complex.
In some cases, the co-op territory or region may have excess capacity on the system, which is a fairly prevalent characteristic of regional grids, as we document in a recent white paper. This makes replacement capacity unnecessary. In other cases, the co-op may need new capacity as well as other grid resources such as flexible demand or storage to maintain system reliability. These solutions will be developed on a co-op-by-co-op basis — what is shown here is the local economic upside that any new renewables capacity would bring.
Co-ops Can Be Renewable Energy Leaders
Co-ops are poised to play a leading role in enabling rural America to reap the benefits of wind and solar development. Federal policy that unlocks this potential is likely to see a strong return on investment in the form of jobs and revenues flowing to rural residents, landowners, and communities.
A $10 billion investment to support co-ops’ energy transition efforts as contemplated in the Biden Administration’s American Jobs Plan would yield just over $50 billion in wind and solar-induced economic development revenues — benefits five times greater than the cost of the policy. Coupled with the lower operating cost of renewable energy and transition support to impacted communities, a modest federal incentive could provide outsized economic benefits to rural communities and position cooperatives to be renewable energy leaders.
The Honda Prologue continues to surprise, ranking among the top ten most leased vehicles (gas-powered or EV) in the US in the first quarter. It was the only EV, outside of Tesla’s Model Y and Model 3, that made the list.
Honda Prologue EV is one of the most leased vehicles
After launching the Prologue in the US last March, Honda’s electric SUV took off. In the second half of the year, it was the second-best-selling electric SUV, trailing only the Tesla Model Y.
The Prologue remains a top-selling EV in the US this year, with over 13,500 units sold through May. That’s not too bad, considering it only sold 705 through May of last year.
According to a new Experian report (via Automotive News), Honda’s success is being driven by ultra-affordable lease rates. In the first quarter, nearly 60% of new EV buyers in the US chose to lease, up from just 36% a year ago.
Three EVs ranked in the top ten most leased vehicles in Q1, including the Tesla Model Y, Model 3, and Honda Prologue.
Tesla’s Model Y and Model 3 took the top two spots, while the Honda Prologue ranked number seven. Those who leased Tesla’s Model 3 paid $402 per month, Honda Prologue lessees paid $486 a month.
Given the average loan rate was $708 a month for those who bought it, it’s no wonder nearly 90% chose to lease. Under 9% chose to buy, while less than 2% paid cash.
The discounts are piling up, but for how long?
To give you a better idea, the average monthly payment for a new vehicle lease in the US in the first quarter was $595.
With over $20,000 in discounts, Honda’s luxury Acura brand is selling a surprising number of EVs in the US. The nearly $65,000 Acura ZDX is sold for under $40,000 on average in May, according to Cox Automotive’s EV Market Monitor report for May.
The trend is primarily thanks to the $7,500 federal EV tax credit, which is being passed on to customers through leasing.
With the Trump administration and Senate Republicans aiming to kill off federal subsidies, the savings could soon disappear. If the Senate’s recently proposed bill is passed, the $7,500 credit would expire within 180 days. It would not only make electric vehicles more expensive, but it would also put the US further behind China and others leading the shift to electrification.
Some automakers, including GM, are expected to continue offering the incentives. “GM has been very competitive on the incentives on their end, and that is not scheduled to end.”
After outselling Ford, GM’s Chevy is now the fastest-growing EV brand in the US through May. Chevy is starting to chip away at Tesla’s lead, largely thanks to the new Equinox EV, or “America’s most affordable +315 range EV,” as GM calls it.
According to Xperian, those who leased a new Chevy Equinox EV in Q1 paid $243 less than those who financed it. The electric Equinox stood out in Cox Automotive’s EV Market Monitor report with an average selling price under $40,000, even without incentives.
The Chevy Equinox EV remains one of the most affordable EVs on the market. Starting at just $34,995, the base LT FWD model offers an EPA-estimated range of 319 miles.
After Hyundai cut lease prices earlier this month, the 2025 IONIQ 5 might just take the cake. You can now lease the 2025 Hyundai IONIQ 5 (now with a built-in NACS port) for as low as $179 per month.
Looking to test out some of the most popular EVs for yourself? With Honda Prologue leases as low as $259 per month and Chevy Equinox EV leases starting at just $289 per month, the deals are hard to pass up right now while the incentives are still here. You can use our links below to find models in your area.
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The US energy storage market just posted its strongest Q1 ever, adding more than 2 gigawatts (GW) of capacity across all segments, according to the latest US Energy Storage Monitor from Wood Mackenzie and the American Clean Power Association (ACP).
That makes Q1 2025 the biggest first quarter for energy storage in US history.
The surge was led by utility-scale projects, which accounted for over 1.5 GW of the new capacity, a 57% jump compared to Q1 2024.
Surging energy demand is putting the electric grid under strain,” said John Hensley, SVP of markets and policy analysis at ACP. “The energy storage market is responding to help keep the lights on and support this unprecedented growth in an affordable and reliable way.”
But that momentum is now bumping up against policy uncertainty that could derail growth in the near future.
Indiana shows what’s possible
Energy storage is no longer limited to early-adopter states like California and Texas. In Q1, Indiana added 256 megawatts (MW) of new energy storage, quadrupling its total installed capacity. It now has more than 10 GW of new storage in its interconnection queue, the fifth-largest in the country.
Indiana’s growth is being driven by available land and clear permitting processes, two major barriers in other states.
“We’re now seeing significant deployment in emerging markets like Indiana, while states across the Southwest like Nevada and Arizona continue to expand their energy storage portfolio,” said Noah Roberts, VP of Energy Storage at ACP.
Home battery boom
Residential storage also set a new record, with 458 MW installed in Q1, the most ever in a single quarter. California and Puerto Rico led the way, accounting for 74% of that growth, while Illinois and other emerging markets began to pick up pace.
Trouble on the horizon
Despite a strong near-term outlook, the long-term picture is cloudier. The five-year forecast for utility-scale storage remains solid, but looming changes to federal policy could slash future growth.
If proposed changes to the Investment Tax Credit (ITC) in the House’s reconciliation bill become law, the total storage buildout over five years could fall 27% below the current base case.
- Distributed storage would take the biggest hit, with a projected 46% drop.
- Utility-scale storage could shrink by 16 GW.
The CCI (community, commercial, and industrial) segment has already seen a 42% cut in its five-year outlook, weighed down by tariff risks and slow adoption of California’s NEM 3.0 rules.
The Q1 2025 results demonstrate the demand for energy storage in the US to serve a grid with both growing renewables and growing load,” said Allison Weis, global head of energy storage at Wood Mackenzie. “However, the industry stands at a crossroads, with potential policy changes threatening to disrupt this momentum.”
In the near term, the report expects 15 GW/49 GWh of new storage capacity to be installed across all segments in 2025, with utility-scale installations projected to grow 22% year-over-year. However, the utility-scale segment is at risk for a potential 29% contraction in 2026 due to policy uncertainty.
Bottom line: the energy storage boom isn’t slowing down – yet. But all eyes are on Congress.
Read more: This new San Diego battery can power 200,000 homes during peak hours
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Environment
Cadillac just delivered the first Celestiq, a hand-built ultra-luxury EV that costs $350,000
The Celestiq is more than an ultra-luxury electric sedan. Cadillac is saying it “marks a new milestone in American luxury and innovation.” The ultra-luxury EV is hand-built at Cadillac House at Vanderbilt, but it’s not cheap. Cadillac’s flagship electric sedan starts at around $350,000.
Cadillac delivers the first ultra-luxury Celestiq EV models
Cadillac is back and better than ever. After delivering the first Celestiq models to customers on Tuesday, Cadillac said it’s out to re-establish the brand as the “Standard of the World.”
The ultra-luxury electric sedan was delivered during a private event at GM’s Global Tech Center in Warren, Michigan.
Each Celestiq model is hand-built at Cadillac House at Vanderbilt, where you can customize the vehicle through a “highly personalized experience.” Cadillac designers and engineers wanted to create the most technologically advanced vehicle possible.
Although the Celestiq was first unveiled in 2022 and was expected to go into production in 2023, the ultra-luxury EV arrives with a slight increase in power.
The electric sedan features a dual-motor AWD powertrain, packing 655 horsepower and 646 lb-ft of torque (with Velocity Max), good for a 0 to 60 mph sprint in 3.7 seconds. Powered by a massive 111 kWh battery, Cadillac says its flagship EV has a range of 303 miles.
Inside, you’ll find ample screen space with a 55″ advanced interactive display that spans the entire dashboard. It’s Cadillac’s first vehicle to feature five standard HD interactive displays, including two 12.6″ entertainment screens for rear passengers.
Other interior features include a panoramic Smart Glass Roof with four independently controlled sections, a 38-speaker AKG audio system, and Climatesense, a “world first” four-zone microclimate system.
Each Celestiq is built to order and assembled at GM’s new Artisan Center on its campus in Warren, Michigan. Prices start in the “mid-$300,000 range.” You can inquire for more information on Cadillac’s website.
Electrek’s Take
Cadillac is coming off one of its best sales quarters since 2008. With a full lineup of electric SUVs, Cadillac is aiming to be the bestselling luxury EV brand in the US this year.
With the entry-level Optiq, midsize Lyriq, three-row Vistiq, and massive Escalade IQ, Cadillac offers an EV in nearly every segment.
Earlier this week, GM announced that the 2026 Cadillac Optiq will be its first vehicle to launch with a built-in NACS port, allowing it to access Tesla’s Supercharger network.
Although Cadillac said the Celestiq would help re-establish the brand as the “Standard of the World,” it will likely play only a minor role. The Optiq, Lyriq, Vistiq, and Escalade IQ will be the growth drivers over the next few years in a competitive luxury EV market.
GM said over 75% of Optiq buyers were new to Cadillac last month. After delivering the first models in late 2024, Cadillac sold over 1,700 Optiqs in the first quarter, outpacing Mercedes-Benz, Genesis, and other luxury rivals in the US.
Looking to test out Cadillac’s new electric SUVs for yourself? We can help you get started. Check out our links below to find Cadillac Optiq, Lyriq, Vistiq, and Escalade IQ models available in your area.
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