Analysis shows $50 billion in stimulus investment would add $400 billion to Pennsylvania’s gross state product, an eight-fold return on investment; increase tax revenues; create jobs; and deliver annual savings to consumers
HARRISBURG, October 20, 2020 – Today, national business group Advanced Energy Economy (AEE) released results of a report that quantified significant economic benefits associated with investments in advanced clean energy deployment for the state of Pennsylvania. 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 potential 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 Pennsylvania,” is available here.
“With Pennsylvania, like the rest of the nation, reeling from the economic impacts of the coronavirus health crisis, this report shows advanced energy delivers an eight-fold return on investment to our state’s economy and can serve as the engine to our economic recovery,” said Daniel Bloom, policy principal at Advanced Energy Economy. “Such public stimulus also attracts billions of dollars in private investment, increases tax revenues and saves consumers — households and businesses alike — billions annually.”
“By investing in energy efficiency and renewable energy and accelerating the shift to electrified transportation, we can generate significant economic activity in the state’s hardest hit communities while also helping Pennsylvania reduce emissions,” added Bloom.
Specifically, the report shows that a hypothetical investment of $50 billion of federal stimulus dollars in Pennsylvania, allocated across a range of advanced energy technologies, would produce the following economic benefits:
- Adding a total of $400 billion to Pennsylvania’s economy (Gross State Product), an eight-fold return on the public investment.
- Attracting $120 billion in complementary private investment, a contributor to GSP impact above.
- Creating 2.6 million new jobs, measured in job-years, resulting in a mix of short-term construction or installation employment along with ongoing positions.
- Increasing tax revenues by $20 billion to local and state governments.
- Saving consumers more than $20 billion in energy costs annually.
The report found that energy efficiency investments delivered the greatest overall boost to the Pennsylvania economy, totaling $287 billion in Gross State Product, and the most jobs (1.6 million job-years). The next biggest impact came from renewable energy generation (both solar and wind), totaling $62 billion and 405,000 jobs. Investments in electric transportation – electric vehicles and associated charging infrastructure – would contribute $32 billion in economic activity and create 259,000 job-years of employment. Building electrification adds another $17 billion to GSP and 161,000 jobs.
In terms of consumer savings, energy efficiency investments produced the greatest benefits. For residential customers, energy efficiency would save $13 billion per year and rooftop solar $1.1 billion annually. Commercial and industrial customers would save $4.8 billion per year from energy efficiency upgrades and onsite solar. Switching from gasoline-powered vehicles to electric would save drivers $930 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 Pennsylvania, adding substantial value to the Pennsylvania economy, creating millions of jobs, and sending additional revenue to state and local governments.
“Pennsylvania is uniquely poised to leverage the economic benefits of advanced energy technologies thanks to its strong manufacturing legacy,” said Bloom. “With more than 104,000 employed in the sector and an established in-state supply chain supported by a broad range of companies, advanced energy can be a reliable economic driver for years to come, while making good on our commitment to deliver secure, clean, affordable energy for all.”
AEE’s Pennsylvania Jobs fact sheet shows there were 104,600 workers employed in Pennsylvania’s advanced energy industry in 2019, more than those working in fabricated metals manufacturing and twice those working in hotels and motels across the state. Employers reported they expected a substantial 5% increase in these jobs before COVID-19 hit*.
A report released by AEE in May found that more than 350 Pennsylvania firms, many of them in industries and geographies that have seen declines in recent years, could easily transition to serving the supply chain for electric vehicles, which is expected to grow at a rapid rate in the coming years.
*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 Pennsylvania 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.