As Congress Stalls, States Take up Greentech Slack

Tue Dec 7, 2010 1:15pm EST

Most don’t expect a newly Republican-tilted Congress to do much about clean energy or climate change, so states are reasserting their dominance as greentech incubators. It helps if they have a lot of rich investors, too.

That’s the gist of Clean Edge’s new U.S. Clean Energy Leadership Index, which gives a snapshot of state-by-state greentech support as 2010 draws to a close. To nobody’s surprise, the best state to do green business remains California. Along with its lion’s share of venture capital and industry-boosting renewable energy mandates, California also voted down an oil industry-backed ballot measure that would have crippled the state’s landmark greenhouse gas reduction law, AB32.

Washington state edged out California to take top rank for green-supporting policies, while Massachusetts had the most energy and environmental regulations and mandates and Illinois won for financial incentives. Michigan took top spot for greentech patents, largely based around the state’s huge role in plug-in hybrid and electric vehicles and supporting battery technology.

Oregon, Colorado, New York, Connecticut, Minnesota and New Jersey rounded out the list, which ranked states on some 80 factors organized under broad headings of technology, policy, and capital. Rankings were per-capita adjusted to make sure small states weren’t left out of the mix. Oregon and Massachusetts were ranked second and third-best greentech states across all categories.

States are going to have a lot of slack to pick up from the federal government, once the tens of billions of dollars in stimulus funding that has given grants, loan guarantees and tax credits to greentech firms dries up. The Department of Energy has given between $50 and $80 billion through American Reinvestment and Recovery Act auspices.

But with Republicans taking over the House of Representatives, the outlook for further DOE clean energy, smart grid and energy efficiency stimulus looks dim, even if Energy Secretary Steven Chu and a host of high-profile greentech investors say the country needs to quadruple its greentech R&D to some $16 billion a year to compete with China and other international competitors.

Republican gains also seem to spell doom for federal carbon cap-and-trade legislation or renewable energy quotas, leaving states to fill the gap through individual renewable portfolio standards or participation in regional greenhouse gas compacts such as the Northeast’s Regional Greenhouse Gas Initiative or the West Coast’s Western Climate Initiative.

For more research on cleantech financing check out GigaOM Pro (subscription required):

  • Cleantech Financing Trends 2010 and Beyond
  • Report: IT Opportunities in Electric Vehicle Management
  • Car Data As the Next Platform for Innovation

Image courtesy of Clean Edge.

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