An economic study of renewable energy programs released today by The Cynthia and George Mitchell Foundation outlines major benefits to Texas over the next 10 years, including the creation of 22,900 new jobs a year and $2.7 billion annually in local and state tax revenue.
Billy C. Hamilton, the former Texas chief deputy comptroller of public accounts, produced the study and will discuss the findings with business and civic leaders at events this week in Austin, Waco, Tyler, Lufkin, Beaumont, Lubbock, Amarillo, Corpus Christi and Harlingen.
“Just as Texas has continued to lead the traditional energy industry by constantly innovating and adapting to changing demands, our state now has the opportunity to increase our economic gains by supporting an expanded, diversified clean energy sector,” Hamilton said. “In the coming years, Texas will compete head-to-head with other states and countries to manufacture, install and maintain more wind power and other large-scale sources of clean energy such as solar and biomass.
“The good news, as demonstrated by the findings in this study, is that with minimal investment clean energy can become an even greater economic engine for Texas, creating good jobs and prosperity for our state,” Hamilton added.
The Cynthia and George Mitchell Foundation, as part of its ongoing effort to spur the development of clean energy markets in Texas and meet the state’s energy needs while reducing pollution and growing the economy, sponsored the report entitled, “The Texas Clean Energy Economy: Where we are. Where we’re going. What we need to succeed.”
The report examines the factors that affect Texas’ energy economy – rising demand for electricity, continued volatility in global energy markets, declining costs for clean energy sources such as wind, solar and biomass, competition with other states and the concerns of average Texans over their electric bills – and presents possible scenarios for the state’s clean energy economy over the next decade.
The study explains how state policies such as Renewable Portfolio Standards (RPS) and state incentives that support growing the clean energy sector can provide citizens and businesses with economic opportunities that create jobs, increase gross state product (GSP) and increase local and state tax revenue.
The Baseline scenario is based on Texas’ 8.6 percent of U.S. renewable electric generating capacity in 2009. Assuming that Texas would innovate enough to maintain its share of U.S. clean energy capacity through 2020, employment in the clean energy sector would increase by 6,000 jobs per year from 2010-20. Texas gross state product (GSP) would increase by $802 million annually, while state and local governments would gain an additional $177 million per year in new tax revenue, or more than $350 million per biennium.
The High Range scenario is based on Texas’ 29.7 percent share of the increase in U.S. renewable electric generation capacity during the state’s wind power expansion from 2004-09, plus an expanded RPS of 13,000 MW of renewable-based power and a set-aside for 3,500 MW of solar photovoltaic (PV) energy. If the state chooses to support the clean energy sector at this level, the economic benefits would be spectacular. Job gains would jump to 22,900 per year, Texas GSP would increase by $2.7 billion per year, and state and local tax revenues would increase by $279 million per year, or more than half a billion dollars per biennium.
Another central finding of the report is that a minimal investment in clean energy development – about the price of a single postage stamp per day for the average family – will allow Texans to claim the benefits forecast in the High Range scenario.
“For most Texans, incremental changes of a few cents per day would be an attractive investment to reap the job creation and investment gains that clean energy can create over the next decade and beyond,” Hamilton said. “The question for Texas policymakers is how best to develop the emerging clean energy sector of our energy economy, so that Texas remains a leader in new energy, as we have always been a leader in the production of oil and natural gas.”
The report also explores an array of obstacles posed by different levels of government regulation, as well as the effect of lapses in federal and state policies that were originally intended to promote the clean energy economy. Periodic lapses in federal and state policy could be problematic for the successful development of clean energy in the years ahead.
Similarly, Texas could lose its standing in the clean energy economy if policymakers choose not to update the RPS standard, which has successfully encouraged wind development in the last decade. In addition, net metering, tax policies and other financial incentives would support the expansion and diversification of the clean energy sector.
In the past, Texas has successfully used investments to encourage the growth of its high tech, biotech and other cutting-edge industries; has used tax policy to stimulate the natural gas sector; and has used the RPS standard to turn Texas into a national leader in wind industry production in just 10 years.