State Legislation Imperative for Cleantech Sector


picture-16.pngSince moving to California two years ago, it seems like I’ve landed in this eco-savvy bubble, cut off from the rest of the country. Looking at the amount of start-up activity and government support for the sector, it’s clear that California is one of the leaders in the clean energy movement.

The California Energy Commision notes that over the last 30 years, while the other 49 states have increased their electricity usage by 50 percent on a per-capita basis, California’s electricity usage has remained relatively stable, thanks to energy efficiency initiatives supported by the state government.

That’s just one example of how state policies are imperative in reducing our country’s dependence on fossil fuels. Pour all the VC money you want into cleantech, the sector still needs a kick from government tax incentives, grants and other financial motivations.

While nation-wide energy legislation such as the energy bills making their way through the House and the Senate could provide a needed jolt to the sector, who knows what the final bill will look like or if it will ever make it past the President’s desk. Too many powerful players, from big oil to utilities, have a stake in the outcome of these bills. And President Bush has already threatened to veto the House’s version of the Bill.

The federal bill still has a long way to go, but dig deeper, and you’ll see that the cleantech sector’s needed boost from the government is already underway, at least on an individual state basis. But will it be enough?

Earlier this year, we had a discussion with “The Cleantech Revolution” author Ron Pernick about how state governments in the U.S. are leading the way toward renewable energy and energy efficiency. “It’s already happening at the state level in places like California and Oregon,” he said. “Now it’s the U.S. federal government’s turn to get serious or risk losing out on the next wave of technological and economic innovation.”

In 2002, California established a renewable portfolio standard (RPS) — that is, a bill that requires electricity providers to obtain a minimum percentage of their power from renewable energy resources by a certain date. The latest update of the bill sets California’s RPS target at 20 percent by 2010. The California Public Utilities Commission also created the California Solar Initiative; it kicked off last January and will provide a total of $2.8 billion over ten years.

picture-15.pngOther states are taking note of the importance of putting dollars and other means of support behind renewables. Take North Carolina, for instance. In August, it became one of the first states in the southeast to pass an RPS. Granted, North Carolina’s 12.5 percent by 2021 RPS seems pretty measly compared with California’s 20 percent by 2010, but it’s still a huge step. (For more on state’s renewable portfolio standards, check out the Energy Efficiency and Renewable Energy RPS site here.)

Meanwhile, government officials in Colorado are promoting an upcoming conference this Fall, “Colorado’s New Energy Economy: The Path Forward.” Spearheaded by The Colorado Public Utilities Commission, the Governor’s Energy Office and the Office of Consumer Counsel, the event will focus on renewable energy policies and how they will impact Colorado’s economy.

Earlier this year, the Illinois House passed a renewable energy standard that will require the state’s utilities to supply 25 percent of power from renewable sources by 2025.

These are just a few examples of what individual state governments are doing to support renewable energy projects. As we wait for the federal government to debate the inner workings of the energy bill, it looks like many state governments will be first at bat in supporting the nation’s cleantech industry.


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