Analysis shows $100 billion in stimulus investment would add $727 billion to California’s gross state product, increase tax revenues, create millions of jobs, and deliver savings to consumers
SAN FRANCISCO, September 29, 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 California. 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 California,” is available here.
“At a time when California is reeling from the impacts of the coronavirus health crisis and climate change, this report shows investment in advanced energy delivers big, with a seven-fold return to the state’s economy, creating millions of in-state jobs and adding much-needed tax revenues to state and local coffers,” said Amisha Rai, managing director at Advanced Energy Economy. “Such public stimulus also attracts hundreds of billions of dollars in private investment and saves consumers — commercial and retail alike — billions annually.”
“By focusing stimulus spending on programs and infrastructure in advanced energy technologies, we can generate significant economic activity in the state’s hardest hit communities while also helping California achieve its ambitious energy and climate goals,” added Rai.
Specifically, the report shows that a hypothetical investment of $100 billion of public investment dollars in California, allocated across a range of advanced energy technologies, would produce the following economic benefits:
- Adding a total of $727 billion to California’s economy (Gross State Product)
- Attracting $263 billion in complementary private investment, a contributor to GSP impact above.
- Creating 4.1 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 $46 billion to local and state governments; and,
- Saving consumers $28 billion in energy costs annually.
The report found that energy efficiency investments delivered the greatest overall boost to the California economy, totaling $373 billion in Gross State Product, and the most jobs (1.9 million job-years). The next biggest impact came from renewable energy generation (both solar and wind), totaling $163 billion, and more than 850,000 jobs. Investments in electric transportation – electric vehicles and associated charging infrastructure – would contribute $80 billion in economic activity and create 475,000 job-years of employment. Last week, Gov. Newsom signed an Executive Order requiring all new passenger vehicles sold in California to be zero-emission by 2035.
In terms of consumer savings as well, energy efficiency investments produce the greatest benefits. For residential customers, energy efficiency would save $15.3 billion per year and rooftop solar $3.1 billion annually. Commercial and industrial customers would save $6.6 billion per year from energy efficiency upgrades and $2.1 billion from onsite solar. Switching from gasoline-powered vehicles to electric would save drivers $1.6 billion 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 California, adding substantial value to the California economy, creating millions of jobs, and sending additional revenue to state and local governments.
“As the nation’s leader, with more than 500,000 employed in advanced energy last year, California can leverage its established in-state supply chain broad range of companies to help our economy rebound and make good on our commitment to secure, clean, affordable energy for all Californians,” said Rai.
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 California 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.
This statement was updated Oct. 1 to correct description of tax revenues; figures were unchanged.