State clean energy funds lead to economic development

January 18, 2012

Washington is again paralyzed and pulling back on clean energy economic development, due to deficit policies and partisanship issues, and as the federal support supplied by the 2009 stimulus law is beginning to expire, a Brookings Institution report has shed light on what states can do to help.

The Huffington Post outlined how the coming crash could be prevented by a change in federal policies, but would require the cooperation of both parties moving forward. The Brookings report, however, noted that states could act on their own to stimulate growth in the industry.

The report, released through the Brookings-Rockefeller Project on State and Metropolitan Innovation, argues that states hold out tremendous promise for the continued design and implementation of smart clean energy finance solutions and economic development.

According to the report, state clean energy funds (CEFs) have emerged as an effective tool that states can use to accelerate the development of projects concerned with energy efficiency and renewable energy.

"These clean energy funds, which exist in over 20 states, generate about $500 million per year in dedicated support from utility surcharges and other sources, making them significant public investors in thousands of clean energy project," the report noted.

The report also outlined how some of the clean energy funds are already supporting a broader range of clean energy-related economic development activities within their states. The adoption of financially-based energy efficiency projects can also help to boost the regional economies for state governments.

The Huffington Post reported that in recent years, some states have launched efforts that have been centered around clean tech innovation support through research and development, financial support for emerging technologies and companies associated with these innovative ideas, and industry development through business incubator programs.

According to the report, certain states have invested significant amounts in clean energy funds. Pennsylvania is one that was highlighted, due to the more than $60 million that was put into renewable energy projects from 1999 to 2010, with another $800,000 being invested in 2010.

Pennsylvania is also host to the headquarters of a national innovation HUB that was designated by the Department of Energy. This effort, known as the Greater Philadelphia Innovation Cluster for Energy Efficient Buildings (GPIC), is geared toward the development and design of energy efficient buildings and technology.

This effort seeks to make the Greater Philadelphia region a national leader in the sector, as it hopes to spur private investment and private-sector job growth through the development of energy efficient technology.