Gov. Deval Patrick and House Speaker Salvatore DiMasi share a common goal for Massachusetts: to create a thriving clean energy industry while improving the state’s response to global warming.
The two are part of a unified effort to decrease Massachusetts’ dependence on foreign oil and to capitalize on the economic and environmental benefits that the clean energy industry represents.
“The House speaker, Senate president and the governor are all very much on board with the notion of Massachusetts becoming a leader in clean energy,” said Paul D’Arbeloff, executive director of the New England Clean Energy Council.
Patrick filed an executive order in April 2007 setting standards for reduction of energy use and greenhouse gas emissions by state agencies. DiMasi filed the Green Communities Act, known as the “clean energy bill.”
The bill would provide a boost to the clean energy industry with tax credits and incentives to encourage homeowners and businesses to install solar panels or wind turbines. The proposed legislation also encourages municipalities to build, own and operate small renewable energy generation facilities and to develop green buildings.
Another major section of the bill would require utilities that distribute electricity to enter in long-term contracts – 10 and 20 years – with renewable energy suppliers.
Finally, the law would require the state to eventually meet at least 20 percent of its energy needs through renewable energy sources.
The spokesperson for the Energy and Environmental Affairs, Robert Keough, said the legislation would not carry a cost to the state.
“It mostly redirects the utility rate process,” he said. “It doesn’t allocate funds but requires utilities to purchase all energy efficiency through power regeneration.”
The Green Act passed the Senate and the House and is currently in a conference committee to work out the differences between the two bills.
Last March, the Senate also passed the Global Warming Solution Act, which would require a reduction in greenhouse gas emissions to 20 percent below 1990 levels by 2020 and to 80 percent below the 1990 level by 2050.
Ten other states have similar emission reduction targets.
Zachary Crowley, a staff member at the Environment Affairs Committee, said no estimates on costs are available yet.
Ian Bowles, the secretary of Energy and Environmental Affairs, is working on a study to evaluate the tools to implement emission reductions, as well as the funds needed. A report is expected for next year.
Top officials hope that these efforts would make Massachusetts a national and even a world leader in the clean energy industry.
So far, California is the state’s chief rival, according to a 2007 report from the Massachusetts Technology Collaborative, an independent agency that works closely with the state to develop the clean energy industry.
One member of the collaborative, the Renewable Energy Trust, already provides financial assistance for individuals and businesses interested in solar panels, wind turbines, bio-energy or hydro-electric energy. The technology collaborative also works with communities to incorporate green design into schools and supports clean energy businesses with grants and various programs.
“We have funded 1,300 clean energy projects across Massachusetts since 2001,” said Emily Dahl, spokeswoman for the cooperative. “The demand is certainly increasing as homeowners and businesses are facing rising energy costs. It makes more and more sense for them to look at clean energy.”
These programs are funded through a state charge on electric bills, which provides $25 million a year to the renewable energy trust.
Gov. Patrick requested an additional $43 million in his budget’s proposal for the Bay State Fund last year to boost clean energy.
A new program, Commonwealth Solar, was launched in January by the technology collaborative at the initiative of the governor to provide rebates to homeowners for solar panel design and construction.
The $68 million four-year plan is financed by a combination of existing funds from the Renewable Energy Trust and the Alternative Compliance Payment funds collected by the Massachusetts Division of Energy Resources.
“What is unique in Massachusetts is that there is a very strong cluster of solar companies in the state,” said Paul Gromer, director of the Solar Energy Business Association of New England.
“In terms of the market for products, – how many solar systems are installed in the state – California and New Jersey are the two first states,” said Gromer. “In terms of support for companies, California is bigger so they have more companies, but Massachusetts is right at the top.”
Gromer said the solar energy industry, which has developed over two decades, has been booming over the last year thanks to the administration’s aggressive policy.
Evergreen Solar, a developer and manufacturer of photovoltaic modules and solar cells, recently announced its decision to expand the manufacturing plant under construction in Devens, creating another 350 jobs.
The Marlborough-based company last year chose Massachusetts as the site for its first American manufacturing facility in part because of a $44 million state incentive package and Patrick’s pledge to increase the solar power market in the state.
The state also could become a leader in wind energy, depending on the approval of a 130 wind turbine farm under the Cape Wind project. Other projects are in various stages of planning.
The goal of greening the state has a double meaning. If alternative energy businesses thrive here, it means more job creation and a great economic opportunity.
According to a 2007 report from the technology collaborative, the clean energy industries already employ 14,400 people and are poised to be the 10th “largest cluster in the state.”
Some 116 companies have been founded since 2001 and the clean energy executives surveyed expect a 30 percent growth for renewable energy firms and a 20 percent growth for energy efficiency firms.
The report said that the industry is on track to generate 75,000 jobs in Massachusetts over the next 10 years. The Biofuels Task Force created last November by the state’s three top officials also released promising numbers in an April report.
The report said that an advanced biofuels industry, including research, and the cultivation and processing of plant material into biofuels could contribute $280 million to $1 billion annually to the Massachusetts economy by 2025.
DiMasi recently announced he would file the “Green Jobs Initiative,” a plan to boost the growing market for clean energy jobs by creating grants for young companies, fellowships for green entrepreneurs and workforce training programs.
The New England Clean Energy Council estimates that it could generate over 13,000 new jobs and $51 million in new annual income taxes. D’Arbeloff, of the New England Clean Energy Council, said there are currently more than 550 clean energy companies in the state and that this number, with these new propositions, will increase fast.
“The Green Communities Act and the green jobs act will definitely have a big impact,” he said. “They set some parameters that would spark new activity and would take Massachusetts, now in the middle of the pack, to the top five states in the country regarding clean energy industry.”
One benefit the Legislature is also seeking is the prestige the state would gain through a successful green policy. It seems to be working.
“We are often contacted by other states,” said Dahl. “They see Massachusetts as a model, as a very successful state in terms of clean energy promotion.”
A report from Environment America, a national advocacy group, gave Massachusetts a “silver star,” ranking the state in the top half for its clean energy initiatives.
“Because of the financial sector, the strong venture sector and the outstanding universities, Massachusetts would always be an epicentre of innovation,” said D’Arberloff.
But D’Arberloff said the state will need to focus on long-term investments rather than temporary programs to continue its leadership role.
“All elements are here,” said D’Arbeloff. “But the challenge is higher than for any other industry, such as telecommunications, which mature in a decade. This is not possible for clean energy. We need to create solutions for several decades.”
There is also a financial and investment challenge facing the development of a leading sector in the state. According to D’Arbeloff, the Massachusetts financial sector is ready to invest close to $2 billion in clean energy companies over the next five years.
But it is estimated that as much as 50 percent to 60 percent of this amount could flow out of the state because there are not enough in-state companies to invest in.
“There has been a tremendous amount of progress last year regarding new start-ups within the state and the focus on local ventures on these new start-ups,” he said. “The most important step is to accelerate this activity.”
By Maite Jullian, Boston University State House Program
27 May 2008
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