On a global scale, the United States is a leader in cleantechnology. However, not every state contributes equally to this designation, and some states are responsible for pulling more than their own weight when it comes to cleantech innovation.
Case in point, the US Clean Tech Leadership Index, which is now in its eighth year, takes into consideration cleantech activities of the 50 states and largest 50 metro areas in the country–from electric vehicles, renewables, policies and investment activities.
According to the report, wind and solar power totaled roughly 16 gigawatts of new additions in 2016, which accounts for roughly 61 percent of all new electricity generating capacity installed in the US two years in a row. Despite US president Donald Trump and his administration attempting to “dismantle climate and environmental protections,” the 2017 US Clean Tech Leadership Index report is indicative that the US cleantech sector is far from suffering.
Top US regions for cleantechnology: key findings
It was just under a decade ago–in 2010–that only three states received 10 percent of their electricity from non-hydro utility scale renewables (wind, solar or geothermal).
Since then, that number has grown to 17 US states, up from 14 in 2016. Leading the pack are Iowa, South Dakota and Kansas, which all generate more than 30 percent of their electrons from utility-scale wind, solar, or geothermal. On top of that, an additional three states exceed 20 percent, namely Oklahoma, North Dakota and California.
In terms of overall state rankings, California and Massachusetts topped the list, followed by Vermont, Oregon and New York to round out the top five.
That said, however, the shift to renewables isn’t limited to just the US: according to the report, renewables accounted for 50 percent of new electric generation capacity additions across the globe in 2016
California on top
When it comes to the top US regions for cleantechnology, it should come as no surprise that California leads the way. In the eight years of the Clean Tech Leadership report, California has ranked number one each time.
According to the report, the states score increased by 2.24 points to 92 points overall, and pushing its lead above Massachusetts up by just under half a point. In terms of solar power, last year alone the sunshine state received more than 27,000 gigawatt hours of utility-scale and distributed solar power, which accounts for five times the amount generated in Arizona–the state with the second most-solar production. California also accounted for more than 1.2 million registered electric and hybrid vehicles, while more tan $9.5 billion was generated in clean-tech venture capital funding over a three-year period.
It stands to reason, then, that many of the country’s top cleantech companies are located in the state.
SolarCity, who was acquired by Tesla (NASDAQ:TSLA) in November 2016 for $2.6 billion is a great example. The company designs, manufactures, installs and sells solar energy systems to residential and commercial customers.
Global energy company SunPower (NASDAQ:SPWR) is another heavy hitter when it comes to manufacturing and installing panels. Since 1985, its headquarters has been based in the Silicon Valley, and has a strong presence across the US, from Hawaii to California to Texas and New York.
Finally, San Francisco-based SunRun (NASDAQ:RUN) is a smaller company also making a big splash. The company is an installation and leasing specialist that is also working very successfully across the country.
State and municipal view
Looking to the rest of the country, as mentioned above Clean Edge’s state rankings place Massachusetts and Vermont behind California, with Oregon, New York, Connecticut, Colorado, Washington, Minnesota and Hawaii rounding out the top 10. As Clean Edge states, these cleantech leaders are “politically diverse.” Of the 10 top states for renewable electricity generation, five are red states and five are blue states.
In terms of cities, the index tracked cleantech activities in the 50 largest US metro areas that fell within the following categories: green buildings, advanced transportation, clean electricity and carbon management, as well as cleantech investment, innovation and workforce.
Again, unsurprisingly, California leads the way in the top metro areas, with San Fransisco holding the number one spot, followed by San Jose, and then Washington, DC; San Diego and Portland as the top five areas. The remainder of the top 10 areas include Los Angeles, BOston, Seattle, Salt Lake City and Austin.
It’s clear to see that cleantech innovation has taken hold all over the US. As it currently stands, California is the clear stand out state when it comes to pressing for adoption, government support and private sector progress. The companies operating in this region benefit from the general culture of cleantech enthusiasm.
As such, for investors interested in the top US regions for cleantechnology, California might be the first and last region you look at for investment opportunities.
This is an update to an article originally published in 2016.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.