The State of the States on Clean Energy

As America enters the next chapter of its political history, with a newly minted Congress and a hobbled presidency, national leadership on climate and energy issues continues to remain a pipe dream. One side wants to accelerate business as usual: more oil drilling, "clean" coal nuclear plants, letting "the market" determine which technologies win or lose. The other side wants to accelerate a new generation of technologies, including renewables, a more intelligent grid, and a strong emphasis on efficiency, with ample subsidies ensuring that these technologies take hold.

So far, business as usual seems to be winning out.

Not that renewables haven't made progress. A decade ago, the growth of solar and wind power was measured in kilowatts. Today it is measured in megawatts, even gigawatts. But solar and wind, despite massive investments and technology breakthroughs, represent a tiny fraction of grid power. Green energy use -- measured as a percentage of all U.S. electricity generation, grew from 2.11 percent in 2003 to just 3.36 percent in 2009, according to the State of Green Business 2010 report, published by GreenBiz.com.

The reason? There are many. It begins with the lack of a comprehensive national climate or energy policy and includes a myriad of roadblocks, barriers, and speed bumps that have made the route to a low-carbon economy frustratingly slow and, for investors and entrepreneurs, needlessly perilous.

National leadership probably will be lacking for the foreseeable future, and even the incumbents are bemoaning the state of affairs. Peter Darbee, chairman of the California utility giant PG&E, recently told the San Francisco Chronicle, "America has gone backwards in terms of our commitment on climate change. It's a terrible disappointment."

Blaming "Washington" for all this is an easy cop-out. Fact is, much of the nation's energy policy happens at the state level. And while national leadership would no doubt help, there are a myriad of rules and regulations at the state level that can accelerate the growth of efficiency and renewables. Together, these policies empower energy customers -- consumers and businesses alike -- to use solar and other renewables to meet their electricity needs, and otherwise create an environment in which alternatives can flourish.

So, I was pleased to see the publication last week of two research reports rating the states on next-gen energy policy. The first, the U.S. Clean Energy Leadership Index, is a subscription publication produced by Clean Edge, a company I co-founded (though I was not involved in the publication's creation). It assesses and ranks more than 80 different state-level indicators.

Each state's overall Leadership score is comprised of three subscores: Technology (such things as a state's overall clean electricity generation, green buildings, and alt-fueled vehicles); Policy (including renewable portfolio standards, renewable fuel standards, efficiency grants and rebates, and net metering laws); and Capital (including venture capital investments, utility energy efficiency program budgets, and green pricing programs). All told, these 80 indicators show how, and how much, states are positioning themselves for a low-carbon future. The index is weighted and data is normalized by state GDP, population, total sales, and other factors.