NEW ENERGY GENERATING JOBS IN MA

Massachusetts Clean Energy Industry Report 2012

August 2012 (Massachusetts Clean Energy Center)

Introduction

Massachusetts is a hotbed of innova¬tion and invention. From computers to life sciences to defense, the Com¬monwealth has been at the forefront of new, ex¬citing technologies for decades. With a robust ecosystem including world-class universities, abundant venture capital, a large professional services industry, and a deep and talented labor pool, Massachusetts has emerged as a leader in clean energy development and integration.

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The Commonwealth ranks second in the nation for private clean energy investment (and first on a per-capita basis), and Massachusetts-based companies have received 17%—or $62.8 mil¬lion—of the federal dollars awarded through the U.S. Department of Energy’s ARPA-E program, which is devoted to advanced energy research projects that are transformational, sustain¬able, and bridge the gap between basic energy research and developmental and industrial in¬novation. At the same time, the Bay State has significantly increased its pro¬duction of renewable energy, with a thirty-fold increase in installed solar megawatts and a 108% growth in electric energy savings from energy efficiency between 2007 and 2011. The clean energy industry creates jobs through¬out the state and keeps the Massachusetts in¬novation engine running.

Market demand for clean energy products continues to increase. In 2011, the Massachu-setts Clean Energy Center (MassCEC) released a groundbreaking report as part of its require¬ment to conduct an annual accounting of the clean energy industry in Massachusetts. The report demonstrated that due to a mix of lead¬ing academic institutions; an active network of technologists, entrepreneurs, and investors; a highly skilled workforce; market-building public policy; and engaged government leaders, Massa¬chusetts was well positioned to take advantage of growing demand. The report also found that the Commonwealth is home to a large and diverse clean energy economy.

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Specifically, the 2011 report found 4,908 clean energy firms in Massachusetts employing 64,310 clean energy workers, or 1.5% of all employees in the Commonwealth. These jobs are found in every county in Massa¬chusetts, across activities ranging from engineer¬ing and research to manufacturing, and across industry sectors ranging from renewable energy to energy efficiency. And employers reported strong growth; at 6.7% growth from 2010, the report showed that clean energy firms were adding employees at a rate more than six times higher than in the economy overall.

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This 2012 report provides updated information regarding many of the findings in the 2011 re¬port. As with the 2011 report, this 2012 report is based on survey data gathered directly from clean energy employers that have been identi¬fied across a wide variety of industries in the Commonwealth. This differentiates the report from other studies, which typically rely solely on databases of known employers—those orga¬nizations that are members of industry associa¬tions, have signed up for various clean energy incentives or programs, or have been otherwise identified as conducting clean energy work. Though these known-employer lists are impor¬tant in researching the clean energy economy, analyses based solely on such lists can under¬count clean energy workers because they miss the large number of companies engaged in clean energy work that have not yet been iden¬tified as part of the cluster. Furthermore, most clean energy employment studies tend to rely on assumptions and economic models, or are based on incomplete or unverified employment counts from secondary sources. These sources cannot capture in-depth employer information because employers are not active participants in the research.

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In order to obtain a more complete picture of clean energy employers, the team conducted a survey of randomly selected Commonwealth employers from industries identified as being potentially related to clean energy. To capture the breadth of the cluster, surveys were administered online and by telephone to a list of known clean energy employers as well as to a representative, clustered sample of companies across the entire Commonwealth. This sample included companies from all across the value chain, from manufacturing to service and from research and development to construction. This same method of employer identification was used for the 2011 report, allowing us to effectively compare data from both years.

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The findings in this report are highly reliable because they come straight from the source: the clean energy employers of Massachusetts. Further, the research refines and validates the findings of 2011. Over the past two years, the research team attempted approximately 45,000 telephone calls and sent over 10,000 emails to employers. This massive survey effort, with a combined margin of error of approximately +/-3.1% at a 95% confidence interval, yielded 930 survey responses.

As a result of this intensive research effort, the 2012 Massachusetts Clean Energy Industry Report provides comprehensive and reliable data on the number of clean energy firms and employees while validating the findings from 2011. This report finds that Massachusetts has a large clean energy cluster with 4,955 clean energy firms that employ 71,523 clean energy workers. For the purpose of this report, a clean energy firm is defined as an employer engaged in whole or in part in providing goods and services related to renewable energy, energy efficiency, alternative transportation, and carbon management. Clean energy workers are defined as spending at least a portion of their time supporting the clean energy aspects of their businesses.

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In addition to the overall numbers, there are several important findings from this research. First, the 71,523 clean energy workers in Massachusetts represent 1.7% of total employment in the Commonwealth, an increase from last year and a number large enough to warrant considering the clean energy cluster a key sector in Massachusetts. Though there are many reasons for the cluster’s strength, one factor is that the cluster has breadth and depth across multiple industries and technology areas. Despite uneven performance within value chain activities, the breadth allows for the cluster’s continued growth and strength in the Commonwealth.

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The research also finds that Massachusetts clean energy employers are growing significantly faster than their peers in other sectors. Since 2011, clean energy employment has grown by 11.2%, nearly 10 times faster than the overall 1.2% growth rate1 among all industries in the Commonwealth over the same period. The 11.2% employment growth rate shows that the pace is in fact quickening, outpacing the same period from 2010-2011 by more than 3,000 jobs. Employers are also optimistic about their future prospects, anticipating 12.4% growth over the coming 12 months.

The following pages include detailed findings of the research, including a review of the size, growth, distribution, and workforce needs of clean energy employers in Massachusetts.

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Conclusion

Clean energy continues to be a shining example of Massachusetts’s innovation economy, and this report underscores its importance to the Bay State. The Massachu¬setts clean energy cluster is growing at a rapid clip of 11.2%, outpacing the overall economy nearly tenfold. The 4,995 clean energy firms and 71,523 clean energy jobs in the Commonwealth are responsible for 1.7% of all employment in the state. The cluster shows no signs of slowing, either, with employers anticipating 12.4% growth over the next 12 months. Such impressive growth certainly cements the cluster’s place as a marquee industry in the Commonwealth.

With only a few exceptions, this growth is spread evenly throughout the Bay State, creating jobs in manufacturing, engineering, sales, and professional services. The Commonwealth’s successes in the areas of renewable energy and energy efficiency technologies highlight a strong and vibrant ecosystem of firms.

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There are a few areas of concern. Despite dramat¬ic growth among most of the value chain activi¬ties, Massachusetts installation and maintenance firms report declining employment. Though the research suggests that this is mostly due to overall weakness in the construction industry, the Commonwealth should do more to spur residen¬tial and commercial installations of clean energy goods and services. Given the research findings, targeted help for small businesses will also pay dividends in this important cluster. Continued commitment to education is clearly critical to maintaining a thriving clean energy cluster in the Commonwealth. Employers in Massachusetts require more education than their counterparts in other states, and the importance of a college degree is in evidence. Though Mas¬sachusetts ranks first in the nation for college degree attainment, more should be done to teach students about STEM fields and clean energy ca¬reers at the K-12 level, increase access to college, expand clean energy baccalaureate programs at public universities, and develop targeted policies to maintain the Commonwealth’s high standard of living in order to ensure that the state is able to continue developing skilled workers and retain¬ing them after graduation.

Massachusetts has long been a hub of technologi¬cal innovation. By continuing to support this growing cluster, the Commonwealth can build upon this success well into the 21st century.

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