We at the New England Clean Energy Council appreciate substantive debate on energy issues, and are glad to see energy at the forefront of conversation in CommonWealth. But readers of previous items posted here may come away with two false impressions: that energy costs have gone up, and that investing in clean energy investments in Massachusetts is a bad idea.
First, high-energy costs are nothing new for New England, for the simple reason that our region has no oil, coal, or natural gas of our own. Nonetheless, over the last few years, Massachusetts energy costs have actually come down, with the Commonwealth becoming more competitive compared to other New England and Mid-Atlantic states. In the three years since the Green Communities Act was passed, the average Massachusetts consumer has seen a decrease in both residential rates and monthly bills, according to data from the Energy Information Administration. The average price dropped from 17.7 cents per kilowatt-hour in 2008 to 14.6 cents in 2010, thanks in part to lower prices for natural gas. In 2008, Massachusetts had the fourth highest residential rate in the nation, while in 2010 we were down to 11th.
Plus, as Massachusetts has become more energy efficient, through efforts like those dramatically expanded by the Green Communities Act, the drop in average residential electric bills has been even more dramatic relative to other states. The average monthly bill in Massachusetts dropped from $109 in 2008, when 33 states had lower household bills, to $97 in 2010, with only 20 states having lower bills.
Secondly, in terms of economic impact, we need to distinguish between money spent on energy imported from out of state and out of the country versus clean energy investments that stay in the local economy. Importing fossil fuels to generate electricity means ratepayers here send billions of dollars out of the New England economy every year. In contrast, for every dollar invested in making our homes and businesses more energy efficient, $3 of savings accrue to consumers, who can spend it in the local economy.
Clean energy investments have many positive benefits, making our energy infrastructure more efficient and sustainable and while growing the regional economy. Though you might not know it from the headlines, the clean energy sector is one of the few bright spots in the economy, growing steadily throughout the recession – 6.7 percent from July 2010 to July 2011 alone. Massachusetts is now home to more than 4,900 clean energy businesses and 64,000 clean energy workers – 1.5 percent of the Commonwealth’s workforce. This job growth is not a transfer of jobs from other industries – it’s a net increase that results from the Massachusetts innovation economy creating new value for national and international markets, not just local.
Clean energy is starting to grow in much the same way as the IT and biotech sectors, which took decades to become powerhouses of our innovation economy. Massachusetts clean energy companies have brought significant new capital from around the world into Massachusetts, earning the largest per capita concentration of US Department of Energy innovation awards. Massachusetts companies have also brought in the second largest concentration of private venture capital in cleantech, a sector which grew 10-fold over the last decade.
Consumers, businesses, and the Massachusetts economy all win if we stick with policies that drive clean energy investments. The combination of efficiency and renewables prescribed by the Green Communities Act is a positive force to control costs and make bills more predictable for consumers. While the prices of natural gas and oil are anything but predictable, the impact of investing in renewables is clear and positive as these technologies continue to get cheaper. Solar costs have come down nearly 60 percent since 2008 while wind turbine prices have dropped 18 percent.
With all due respect to AIM’s Robert Rio, there is no consensus against clean energy in Massachusetts. The handful of voices trying to roll back the Commonwealth’s clean energy policies do not speak for the entirety of the state’s business community, nor do they represent the innovation industries where the Commonwealth has long excelled.
Regions compete by leveraging their comparative advantages, and ours is innovation. If we stay the clean energy course, we will have the pole position to succeed in this emerging industry.
Peter Rothstein is president of the New England Clean Energy Council.