SCHWARTZ RENEWABLOG

California & New York Give Cleantech Big Wins; Net Metering and Incentives to Drive Growth

To any cleantech industry stakeholder the lack of a coherent federal energy policy, including an RPS, emission reduction targets and national cap and trade, can be frustrating. But it is important to realize that progress is being made and that several large states could drag the rest of the country with them kicking and screaming just through good ole fashioned economic influence.

So some celebrating was definitely in order this week when California extended its net metering program for solar and established a well defined and generous $2+ billion cap. New York also went public with a major state investment in renewables and energy efficiency which will help drive adoption throughout the state.

"But that is only two states," one might say.

But they are the two states, given they are first and third in both population and gross domestic product (GDP), with only Texas in between. And despite Texas' heavy investment in wind energy and to some extent, solar, it is still oil and gas land and a long way from being clearly progressive on energy policy.

California and New York combined for a GDP of more than $3 trillion in 2011. That exceeded the GDP of all but four countries: the US, China, Japan and Germany. They represent more than 20 percent of total US GDP, so really it is the equivalent of about 10 states pushing efficiency and renewables adoption on a straight percentage basis.

In this way, cleantech policy is really more of an electoral map than a traditional map. If cleantech advocates can win in places like California, NY, Texas, Florida, Ohio, Virginia, Pennsylvania and New England, they can drag the rest of the country to a more progressive stance on renewable energy and energy efficiency.

How does that happen? Through economic might.

California and New York are not just rich in population and GDP, but also in wealth. No consumer products or commercial products or services company in their right mind would concede the California and New York markets because they have more stringent environmental policies.

In fact, look at the electric vehicle (EV) and hybrid vehicle markets. This is a growing and emerging industry thanks in large part to the market might of California, which has the best incentives and most stringent emission requirements of any state in the country. Most EVs are sold in California and their success has led to global manufacturers like GM, Ford, Toyota and Nissan focused on developing all-electric vehicles, and led to the growth of Tesla, CODA and Fisker. 

So while the lack of federal legislation may be frustrating to some and the Obama administration relies on the might of federal agency purshasing power to drive cleantech adoption, progressive states like California, New York, Massachusetts and New Jersey may just force the rest of the country to become more efficient and green--like it or not.

Posted by Jason Morris on May 25, 2012 at 2:37 PM