Iowa’s clean energy edge in a competitive economy

This year’s edition of Common Sense Institute’s Free Enterprise Report found Iowa's energy competitiveness to have risen to 1st place nationally in 2024, thanks in part to Iowa’s strong clean energy leadership.

Founded in Colorado in 2010 and expanded into Iowa in 2024, the CSI examines the fiscal impacts of policies, initiatives, and proposed laws. CSI remains committed to providing high quality data, research, and analysis essential for citizens, businesses, and elected officials to make thoughtful policy decisions. Thus far, the data show Iowa’s transition to cleaner energy sources has made the state stronger and more competitive.

Ranking first in the nation with 65% of all electricity coming from wind, solar, and battery storage, Iowa is no stranger to clean energy development. According to CSI’s report, Iowa’s rank for “share of electricity produced by clean energy” has risen from 23rd in the nation in 2011 to 7th in 2023. The improvement came with the state’s rapid growth in wind energy production.

Critics of often argue transitioning to clean energy jeopardizes reliability and drives up costs for consumers. Not so in Iowa. As the state has increased its power generation from renewable sources, its overall electricity generation capacity and its reliability have both increased. It has meanwhile remained price competitive.

The state’s nameplate capacity rose 6 spots between 2011 and 2023, and its reliability rose 29 spots. Its residential electricity price competitiveness has improved 3 spots. But the energy transition brings other benefits not quantified in the index.

The report found Iowa’s economy is largely correlated with global commodity prices over which Iowa businesses, policymakers, and residents have little or no control. This comes as no surprise given Iowa’s excellence in agriculture. It also means farmers experience income fluctuations beyond their control and may seek alternative revenue streams to sustain their operations — such as clean energy.

Iowa has struggled to improve its infrastructure competitiveness ranking significantly, climbing only a net five points from its low of 47th in 2011 to 42nd in 2023. Iowa ranks last in bridge quality which poses dangerous conditions for drivers, particularly in rural areas. Property tax revenue from wind and solar projects can be used by counties to support infrastructure such as bridges.

Compared to other states, Iowa’s transition to clean energy has been smart and sustainable. The Free Enterprise Report found Iowa’s combination of low energy costs, rapid renewable growth and a favorable environment has attracted businesses seeking sustainable, cost-effective energy, as seen through the $29 billion already invested in Iowa because of clean energy.

Iowa’s history of strong clean energy leadership is an example of how the energy industry can allow Iowa to diversify its power supply and strengthen its energy grid, creating homegrown energy to sustain our present needs and prepare for our future.

Lisa Feuerbach is the Executive Director of the Common Sense Institute of Iowa