Analysis shows $45 billion in stimulus investment would add $357 billion to Illinois’ gross state product, an eight-fold return on investment, increase tax revenues, create millions of jobs, and deliver annual savings to consumers
CHICAGO, October 8, 2020 – Today, national business group Advanced Energy Economy (AEE) released results of a report that quantified significant economic benefits associated with investments in advanced energy deployment for the state of Illinois. The report, which was produced by international economics consultant Analysis Group for AEE, used an industry-standard modeling tool to estimate the impact of investing state or federal stimulus funds in advanced energy technologies, products, and services to boost economic activity in the wake of the COVID-19 slowdown.
The full report “Economic Impact of Stimulus Investment in Advanced Energy: An economic assessment of applying stimulus funds to advanced energy technologies, products, and services in Illinois,” is available here.
“As Illinois considers how to respond to the severe economic impacts of the coronavirus health crisis, this report shows investment in advanced energy delivers a whopping eight-fold return to our state’s economy, creating in-state jobs and adding much-needed tax revenues to state and local coffers,” said Daniel Bloom, policy principal at Advanced Energy Economy. “Such public stimulus also attracts billions of dollars in private investment and saves consumers — commercial and retail alike — billions in energy costs annually.”
“By investing in energy efficiency and renewable energy, while accelerating the shift to electrified buildings and zero-emission transportation, we can generate significant economic activity in our hardest hit communities while also helping Illinois achieve its ambitious energy and emissions reduction goals,” added Bloom.
Specifically, the report shows that a hypothetical investment of $45 billion of public investment dollars in Illinois, allocated across a range of advanced energy technologies, would produce the following economic benefits:
- Adding a total of $357 billion to Illinois’s economy (Gross State Product), an eight-fold return on the investment.
- Attracting $110 billion in complementary private investment, a contributor to GSP impact above.
- Creating 2.1 million new jobs, measured in job-years, resulting in a mix of short-term construction or installation employment along with ongoing longer-term positions;
- Increasing tax revenues by $31.3 billion to local and state governments; and,
- Saving consumers more than $16 billion annually in energy costs.
The report found that energy efficiency investments delivered the greatest overall boost to the Illinois economy, totaling $237 billion in GSP, and the most jobs (nearly 1.3 million jobs, measured in job-years). The next biggest impact came from renewable energy generation (including utility-scale solar, wind and distributed generation solar), totaling $56 billion, and 357,000 jobs. Investments in electric transportation – electric vehicles and associated charging infrastructure – would contribute $30 billion in economic activity and create 240,000 job-years of employment across the state’s electric vehicle supply chain. Building electrification adds $18 billion in economic activity and 140,000 jobs.
In terms of consumer savings, energy efficiency investments produced the greatest benefits. For residential customers, energy efficiency would save $10 billion per year and rooftop solar $930 million annually. Commercial and industrial customers would save $4.2 billion per year from energy efficiency upgrades and onsite solar. Switching from gasoline-powered vehicles to electric would save drivers $850 million in fuel costs.
The report notes that a greater or lesser level of stimulus investment would result in greater or lesser economic impact, but the modeling shows that advanced energy stimulus investments can generate important and positive economic benefits in the state of Illinois, adding substantial value to the Illinois economy, creating millions of jobs, and sending additional revenue to state and local governments.
“Illinois is uniquely poised to leverage the economic benefits of advanced energy technologies thanks to a strong foundation established by the Pritzker Administration and leadership from the General Assembly,” said Bloom. “With more than 137,000 employed in the sector and an established in-state supply chain supported by a broad range of companies, advanced energy is poised to lead our economic recovery, while making good on our commitment to deliver secure, clean, affordable energy for all.”
AEE’s Illinois Jobs fact sheet shows there were 137,300 workers employed in Illinois’s advanced energy industry in 2019, more than those working in Supermarkets & Groceries, and twice those in Real Estate across the state. Employers in the sector reported they expected a substantial 6% increase in jobs before COVID-19 hit*.
*NOTE: Employment data was derived from the 2020 U.S. Energy and Employment Report produced by the Energy Futures Initiative (EFI) in association with the National Association of State Energy Officials (NASEO) and collected and analyzed by BW Research Partnership, as well as data from the U.S. Bureau of Labor Statistics.
About Advanced Energy Economy
Advanced Energy Economy (AEE) is a national association of businesses that are making the energy we use secure, clean, and affordable. Advanced energy encompasses a broad range of products and services that constitute the best available technologies for meeting energy needs today and tomorrow. AEE’s mission is to transform public policy to enable rapid growth of advanced energy businesses. Engaged at the federal level, in Illinois and more than a dozen states around the country, AEE represents more than 100 companies in the $238 billion U.S. advanced energy industry, which employs 3.6 million U.S. workers. Learn more at www.aee.net, track the latest news @AEEnet.