Unlike most other states, Indiana has resisted developing renewable energy standards, leaving the state at a disadvantage for new business investment, critics say.
The state is one of only 14 nationwide without a renewable energy standard, according to the Pew Center of Global Climate Change. The standards typically require electric utilities to generate a certain amount of electricity from renewable or alternative energy sources by a given date.
Indiana lawmakers have considered renewable energy standards the past four years but have failed to pass a bill. The measure failed last year because of concerns that electricity rates would increase and one senator's desire to include nuclear energy among renewables.
Michael Shore, spokesman for the Michigan Economic Development Corp., said he thinks such standards are a key step for states in attracting businesses.
"The renewable energy standard by itself is only a first step. It's like a high school diploma or GED. You're not ready to be a professional in any field, but you can't realistically get there, or easily get there, without it," he said.
In 2008, Michigan passed a law requiring utilities to get 10 percent of their energy from renewable sources and energy efficiency by 2015. Last year, the state supplemented the standard with tax credits for renewable energy development.
Other states have even higher standards. Illinois in 2007 adopted a standard calling for 25 percent of energy from renewables by 2025, 75 percent of it from wind. Ohio requires 25 percent of all electricity sold in 2025 to come from alternative energy, including clean coal.
Shore said Michigan's move has helped the state attract more than $9 billion in investments in alternative energy.
"That $9 billion is projected to create more than 9,000 jobs over the next 10 years. We've gotten significant new investments in solar-energy manufacturing, wind energy, biofuels as well as advanced battery. Those are the green, sustainable energy sectors we've targeted," he said.
Jesse Kharbanda, executive director of the Hoosier Environmental Council, said concerns that electricity rates will increase if utilities have to get a certain percentage of their energy from more costly renewable sources can be addressed.
"It's a valid concern for people in a bad economy to be worried about rate increases, but we're willing to put a cap on it," he said. "Rates would not increase more than, say, 5 percent compared to business as usual."
Bryant Mitol, a Valparaiso resident who works for Earth Solar Technologies of Indianapolis, said states like Illinois have gotten a big boost from the renewable energy standards. "They're serious about it," he said.
"Here, the powers that be are still pushing for coal. In Ohio and Illinois, they're making great strides, but here we are in Indiana. I think the coal lobby is just really, really strong here."
Indiana has attracted major wind projects, such as BP's wind farm in Benton County, without the renewable energy standards. But Kharbanda says that's misleading.
"The governor and other politicians will talk about the investment coming into our state without the renewable energy standard," he said. "The problem with that argument is, the investments have been driven by the RES. They've either been driven by RES in other states, which Indiana wind is tapped to comply with, or they view it as an incremental tool. They'll sort of lead legislators to inaccurately conclude there's no need for a renewable energy standard.
"In the scheme of things, wind farms like BP are very impressive, but they only lead to 1 to 2 percent of our electricity use."