Tracking State Efforts to Foster Economic Development through Clean Energy Research and Development Agencies

Aug. 25, 2016 by Jeffrey J. Cook

In 2015, Virginia enacted SB 1099 establishing the Virginia Solar Energy Development Authority within the Department of Mines, Minerals and Energy to, among other stipulations, foster solar deployment, jobs, and economic development within the state. Ultimately, state governments are active in implementing clean energy-related economic development policies with the intention of driving job growth and manufacturing in their respective states.[1] Virginia’s approach to house all of these activities within one entity is an emerging trend across the states. This article documents the range of similar public organizations and their programs across the country, to inform policymakers considering a more comprehensive clean energy-related economic development approach, while also documenting potential research, development, and commercialization partners for the solar industry.

U.S. map with New York, Virginia, Maryland, Massachusetts, and Hawaii highlighted.

To date, five states have established a public or quasi-public agency to foster economic development by supporting the development of clean energy technologies, including Hawaii, Maryland, Massachusetts, New York, and Virginia (see figure to the right).[2]

New York has the longest history of supporting clean energy technology deployment and commercialization. At least since 1992, the New York State Energy Research and Development Authority (NYSERDA) has offered clean energy developers resources to help bring their products to market. NYSERDA’s series of “Growth Essentials” programs support six clean energy technology incubators across the state. To date, these incubators have supported 137 clients that have brought 152 new products to market. In 2008, three states (Hawaii, Maryland, and Massachusetts) followed New York and created clean energy research and economic development agencies.

First, Hawaii launched the Hawaii Clean Energy Initiative (HCEI) in partnership with the U.S. Department of Energy. Some of the objectives of this initiative include demonstrating innovative technology and creative financing to deploy clean energy solutions. HCEI also focuses on workforce development and fostering an “open source” learning model so communities can more readily adopt innovative, successful approaches to build clean energy-based economies.

Second, the Maryland Clean Energy Center (MCEC) was established to “advance clean energy and energy efficiency products, services, and technologies as part of a specific economic development strategy” (MCEC 2014a para 1). Among other activities, MCEC offers businesses access to low-cost capital via public-private partnership opportunities. In addition, MCEC has been studying the benefit of establishing a green bank in the state to increase clean energy deployment.

Third, the Massachusetts Clean Energy Center (MassCEC) was created to accelerate “the success of clean energy technologies, companies, and projects in the commonwealth – while creating high-quality jobs and long-term economic growth” (MassCEC para 1). Similar to NYSERDA, MassCEC offers a variety of programs based upon the technology’s position within the innovation life cycle, or path to commercialization. MassCEC has also commissioned studies relating to energy storage and clean energy microgrids with the goal of building these emerging markets.

As noted, Virginia adopted the Solar Energy Development Authority in 2015. Prior to creating this agency, in 2010, the state established a similar technology-specific organization the Virginia Offshore Wind Development Authority (VOWDA). The objectives of VOWDA are somewhat less expansive, focusing on removing regulatory barriers to offshore wind deployment and making recommendations to foster increased offshore wind development, among others. VOWDA’s most recent recommendations and updates on its work were published in 2015. The Solar Energy Development Authority is expected to publish a similar report of its first year’s activities in October, 2016.

Overall, it is clear that these entities support technology research, development, and commercialization and capture local economic development benefits, as well. NYSERDA’s long term and comprehensive investment, resulting in 152 new products in the market, is a clear model for measurable impacts driving new and innovative clean energy technologies to market. Policymakers interested in similar goals may wish to consider developing comparable organizations within their states to carry out similar goals.

[1] The National Governors Association tracked state adoption of certain clean energy-related economic development actions in its State Clean Energy Actions Database from 2008 – 2015. The Center for the New Energy Economy has also tracked advanced energy-related economic development legislation in its Advanced Energy Legislation Tracker since 2013.

[2] The state of Wisconsin has partnered with the Mid-west Energy Research Consortium that has a similar though broader focus on energy.