Break Down of the 2014 Massachusetts Clean Energy Industry Report

Every year, the Massachusetts Clean Energy Center submits a report on the clean energy job industry. The Center collected the data for this report by surveying nearly 2,000 employers across the Commonwealth. The Report finds that Massachusetts has experienced tremendous growth within the clean energy industry across the Commonwealth in almost all business environments over the past few years. The Report is a lengthy document that covers every aspect of the clean energy industry, including, energy efficiency and renewable energy; job growth and business development by region; technological growth; vendor analysis; private investment; growth equity; and more. The purpose of this blog post is not to provide an executive summary of the entire report, but rather to summarize the key points related strictly to energy efficiency.

For four years running, Massachusetts has claimed the #1 spot as the most energy efficient state in the U.S. So, what exactly is Massachusetts doing differently from the other states for it to receive the crown four years in a row? According to the 2014 Clean Industry Energy Report, an annual report released by the Massachusetts Clean Energy Center (MassCEC), “High fossil fuel energy costs, strong and progressive policy support, continued price declines of clean energy goods and services, and a robust state economy with relatively high per capital incomes” are the primary factors making Massachusetts the leader in energy efficiency. Notably, “Two-thirds of firms involved in energy efficiency (66.9%) report that their customers are primarily in Massachusetts” (Massachusetts Clean Energy Report, p. 27).

Location

Clean Energy by the Numbers

Clean energy refers to renewables (solar and wind) and energy efficiency products, and over the past few years, Massachusetts has experienced a surge in economic development within these sectors. Between 2013 and 2014, clean energy employment has grown by 10.5%, along with an anticipated 13.3% growth rate to 6,000 employers, 100,000 workers, and 11,700 new jobs by early 2015. “Energy efficiency firms account for approximately 65,000 clean energy jobs in Massachusetts and more than 4,000 establishments, representing a 37% growth in the number of firms conducting energy efficiency work” (p. 2). More notably, clean energy job growth rose 47% between 2010 and 2014 (p. 1). Business owners note incentives, tax credits, and rebates are the key policies and programs that further their growth. Below depicts graphs of the percentage of employment by activity area:

Activity-Area
Activity-Area-2
Source: MassCECM

Growth & Business Development

Clean energy represents a $10 billion industry in Massachusetts, accounts for roughly 2.5% of the total gross state product (GSP), and employs approximately 2.4% of all workers, which is larger than the insurance industry. Since 2011, “Massachusetts has created or attracted more than 1,000 new establishments ” (p. 24). Below depicts graphs of the establishments by activity.

Establishments-by-Activity
Establishments-by-Activity-2

Private Investment

In 2014, $700 million was invested in Massachusetts clean energy companies, a 14% increase over the $614 million invested in 2011, and 86% higher than the $376 million invested in 2010 (p. 36). The MassCEC Investments Program, composed of 16 companies, “makes direct equity and debt investments in early stage clean energy companies in the Commonwealth to accelerate growth, create jobs, and advance technology and commercialization” (p. 38).

Innovation and Energy Efficiency

As we reported earlier in the year, Boston is a hub of energy efficiency innovation. Companies such as Digital Lumens and Bytelight are leading the way in new technology and innovation, keeping Massachusetts in the limelight of energy efficiency solutions. Businesses dedicated to new energy efficient technologies thrive in Massachusetts due to its “. . . highly-educated and entrepreneurial workforce, academic research centers, and developing local innovation ecosystem” (p. 8). Approximately 500 energy efficient-focused companies are developing new pre-commercial technologies in 2015.

Energy Efficiency Policies and Programs

The Report conducted a study that asked clean energy firms which programs are accelerating the most growth in the clean energy industry in Massachusetts. Not surprisingly, incentives and rebates ranked the highest, at 23% and 16%, respectively (p. 28). Utilities in Massachusetts, including Eversource, National Grid, Unitil, Liberty Utilities, and more, have been pushing these programs to augment energy efficiency savings in order to comply with state- and federal-level mandates.

Why Commercial Energy Efficiency is Important

According to a 2013 study by the Alliance Commission on National Energy Efficiency Policy, “Buildings consume almost 40% of the nation’s primary energy, making building energy codes a critical tool for cutting U.S. energy consumption” (p. 9). In today’s tech-driven economy, infrastructures have been formatted with technological advancements, but at the expense of higher energy consumption through more appliances and electronics. Without building sustainability initiatives, combated by local and federal governments, as well as institutions such as the U.S. Green Building Council (USGBC), buildings would take a much larger slice of our nation’s primary energy consumption pie.

Final Thoughts

Massachusetts is experiencing a surge in economic growth and business development due to clean energy advancements. More and more companies seek energy efficiency upgrades and green building designs, erecting a plethora of new businesses, jobs, and capital investment ventures. Boston, well-known in the U.S. as the hub of education, biotechnology, and financial services, can now add clean energy to its already impressive business catalog. We look forward to taking part and being in the center of the Massachusetts clean energy revolution over the years to come, and witnessing the exciting technological advancements and innovations that will reshape the way we live and work.

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