If you’re a business owner looking to get the most value from these energy sources, where should you go to get the most bang for your buck?
As the United States continues to develop its renewable energy options, it has never been more economically beneficial for businesses to take advantage of these clean energy sources. Solar, wind, and hydroelectric continue to rise in popularity, application, and efficiency. This has made entrepreneurs across the country more inclined to develop their businesses with the affordable nature of renewable energy in mind.
The United States has invested approximately $7.7 billion in energy efficiency in 2016, according to the American Council for an Energy-Efficient Economy (ACEEE). And while under President Trump’s “America First Plan,” energy policy is changing and becoming less regulated for fossil-fuel sources, it is also an opportunity for States to incentivize more carbon-neutral options. Both energy producers and energy consumers can utilize these policies and reduce the cost of their operation.
“There’s a lot of interest in green energy,” Al Titone, deputy district director of the Small Business Administration’s New York District Office said in Inc. “With the government putting money into it, that pretty much guarantees there’s going to be more of a market for it in the future.”
While the nuance of determining the most affordable state to run a business on renewable energy is quite complex, the ACEEE breaks down energy efficiency by incorporating factors like public utility programs, transportation policy, energy regulation, and state level incentives and safety standards.
According to the 2016 State Energy Efficiency report — which ranks all 50 states and the District of Columbia — the most energy efficient state is a tie between California and Massachusetts.
Vermont, Rhode Island, Connecticut and New York complete the top-five with Missouri, Maine, and Michigan showing the most improvement since the 2015 report.
California continues its trend of leading the country in electricity savings, specifically by using its state level programs to allocate funding to energy efficient schools.
Massachusetts aims to set a more ambitious state-level goal for clean energy with petitions for the 100 Percent Renewable Energy Act for 2050. This could provide Massachusetts business owners, who are already seeing an average trend of 2.9% in annual electricity savings under the current renewable energy legislation, with an even bigger reduction.
These energy efficient states are seeing a larger boom in job development as well. Jobs in solar have grown 25% between 2015 and 2016 — with over 100,000 jobs in California and 14,582 in Massachusetts. The Natural Resources Defense Council (NRDC) estimates that wind energy will result in over 220,000 new jobs and nearly $23 billion by 2020.
But jobs in renewable energy don’t tell the entire story. What businesses do need to account for is the cost of energy per use.
Business owners should also note that while some states may lead the way with a larger percentage of renewable energy production, the cost of that power may be higher than states with a more balanced or diverse energy portfolio.
On average, a businesses in 2015 used about 6,305 kilowatts per hour (kWh) of energy per month, at a national average of 10.08 cents per kWh. However each of the five states the ACEEE labeled as leaders in energy efficiency had an average cost higher than the national average. States with the lowest energy cost, such as Louisiana, Washington, North Dakota, Oklahoma, and Arkansas respectively were actually ranked lowest in the 2016 State Scorecard.
This isn’t surprising due to the large amount of fossil fuel development occurring in these states. According to a 2010 report from the U.S. Energy Information Administration, 29% of all the country’s energy consumption in the industrial sector was allocated to the refinement of petroleum fuels, followed by the chemical, paper, and metal industries.
Entrepreneurs looking to capitalize on the affordable future of renewable energy have a lot to consider. While the immediate costs of electricity can seem like an influential metric, states that seem more expensive today show a steady trend of declining prices as sustainable deployment across the country increases.
These emerging technologies, which take affordable and flexible energy options out of the realm of science fiction and into the hands of consumers, are happening now — so business owners may want to consider starting up in California, Massachusetts, Vermont, Rhode Island, Connecticut, and New York.