Cracking the Code on California’s Clean Tech Leadership

Clean Tech IndexBy: Katie Hsia-Kiung

It may be hard to believe that just 15 years ago the term “clean tech” was largely unheard of. Today, the term has gained widespread usage, and is often applied to a diverse array of businesses, practices, and tools. Clean tech not only includes renewable energy technologies like wind and solar, but also electric motors, green chemistry, sustainable water management, and waste disposal technologies, to name just a few.

One research institution that has followed this sector through its short, but burgeoning history, is Clean Edge, a firm devoted exclusively to the study of the clean tech sector. Last week, the firm released their annual U.S. Clean Tech Leadership Index, which ranks each state based on several indicators across three categories: technology, policy, and capital. For the sixth year in a row, California came out on top as the leading state for clean technology. In fact, over the past year, California has widened its lead over the rest of the pack, with a score that is 15 percentage points higher than Massachusetts, the state in second place. According to the report, “with 55,000 people employed in its booming solar industry alone, a carbon market in place with its AB 32 trading scheme, and a 50 percent renewables goal by 2030 set by Governor Jerry Brown, California sets the pace for what a clean-energy economy looks like.”

There are several drivers behind California’s success, including the significant amount of capital being invested in clean tech research and development. In 2014, California alone accounted for a little over half of all clean energy venture capital dollars invested in the country. Not only did California have the largest total number of dollars invested, but also the most dollars invested per person in the state. California’s leadership is also due to its impressive mix of renewable energy sources, including wind, geothermal, hydro, and solar. California was the first state to see utility-scale solar reach five percent of total electricity generation, and according to Clean Edge, “it’s in solar power where the state wears the undisputed crown.” The booming solar industry has contributed to the significant job growth in the Golden State’s clean economy, which has outpaced the growth of jobs in the overall state economy by a factor of ten according to a recent study. California can also boast having more electric and hybrid electric vehicles on the road than any of the other 49 states.

“California is home to huge centers of ingenuity and capital investment in San Francisco and San Jose, which together have raked in more than $5 billion in clean-tech venture capital investment over the last three years alone” noted Andrew Rector, Lead Analyst, Clean Edge Leadership Index when asked more about what lead to California’s top ranking. “The state places in the top 10 nationally for electricity from renewable sources (solar, wind, geothermal, hydro, and biomass) and is nearing one million hybrid, electric, and natural gas vehicles on its roadways. All of this development has been spurred on by progressive state policies, particularly those that encourage renewable energy development.”

As Rector mentioned, another factor driving California’s leadership is the state’s comprehensive package of clean energy and climate policies, which has played a large part in encouraging clean tech investment and renewable energy deployment. Just last week, the California state Senate and Assembly passed landmark pieces of legislation designed to lock in a climate pollution reduction target of 80 percent below 1990 levels by 2050 and encourage the continued role of market mechanisms like cap-and-trade in achieving the state’s long-term goals. The history of leadership demonstrated by the legislature on these issues and the support from Californians across the state is an integral part of why the Golden State is still ranked first in clean tech leadership after all of these years. What’s more, the technological innovations borne out of the investments made in California will help the state get the emissions reductions it and the planet so desperately need.

Although the clean tech sector is relatively young, it’s mighty and growing with immense momentum. With growth comes opportunity, but also unique challenges. One of those challenges is ensuring equitable access when it comes to the adoption of new and advanced technologies. It’s critically important to make sure these clean energy solutions reach low-income communities and communities of color, which are affected more severely by climate change and are often overburdened by toxic air. The solar industry is proving that it is possible to get new technologies into the hands of those that need it most. With the help of policies like SB 535 (De León), which directs proceeds from the state’s cap-and-trade program to disadvantaged communities across the state, we are hopeful that this trend will continue.


This post originally appeared on our California Dream 2.0 blog.

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