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Clean energy is now as big as pharmaceutical manufacturing in the US

With $200 billion in revenue, it’s sneaking up on consumer electronics.

building heat
Detecting some heat (with a thermal sensor that shows where energy is leaking from a home).

Across the world, myriad efforts are underway to make energy systems cleaner, smarter, and more efficient.

But it’s hard to get a sense of the total size of those efforts, as they are spread across so many different industries and regions.

One organization that has given this quite a bit of thought is Advanced Energy Economy (AEE), a national trade association of businesses working on cleaner and smarter energy.

What exactly is “advanced energy”? AEE includes the following seven sectors:

  • Building efficiency (HVAC, lighting, district energy, etc.)
  • Electricity delivery and management (transmission, distribution, storage, etc.)
  • Advanced transportation (vehicle design, freight logistics, etc.)
  • Fuel production (ethanol, biodiesel, etc.)
  • Advanced industry (combined heat and power, manufacturing processes, etc.)
  • Fuel delivery (fuel transportation infrastructure, stations, etc.)
  • Electricity generation (wind, solar, hydro, nuclear, etc.)

Various people might quibble over various businesses included here — there is, for example, endless debate on the environmental benefits of ethanol and biodiesel — but one way or another, these businesses are working to change the wasteful, fossil-fueled energy status quo.

So, all that said, just how big is the advanced energy industry?

To find out, AEE contracted Navigant Research to measure the growth and size of both the national and global advanced energy industries from 2011 through 2016.

If you’re interested in the details for each subsector (there are 42!), dig into the report. Here, for the TL;DR crowd, are some of the topline findings.

Globally, advanced energy is growing spectacularly fast

Globally, advanced energy brought in $1.4 trillion in revenue last year, which is, the report says, “nearly twice the size of the airline industry, equal to apparel, and close to global spending on media, from newspapers to movies to video games...”

global advanced energy industry (AEE)

What’s more, the advanced energy industry is growing much faster than the world economy overall (7 percent vs. 3.1 percent).

global advanced energy growth (AEE)

Advanced energy now supports 3.3 million jobs in the US

In the US, the story is much the same: The advanced energy industry is big!

As of last year, it brought in $200 billion in revenue, which is “nearly double beer sales, equal to domestic pharmaceutical manufacturing, and approaching wholesale consumer electronics.” That’s up 28 percent since 2010. The industry now supports 3.3 million jobs in the US.

us advanced energy industry (AEE)

If you factor out ethanol, which has taken a big hit in the past year, the industry is growing much more rapidly than the national economy.

us advanced energy growth
On the right, orange is the rate of growth including ethanol; grey is excluding ethanol.

Trends within the industry: solar up, ethanol down

There are 17 separate “key trend” stories — but a few things jump out.

First, the building efficiency industry is booming, experiencing rapid growth both globally (14 percent year over year) and in the US (8 percent). Every subcategory of the building efficiency industry experienced growth last year.

us building efficiency growth (AEE)

Similarly, solar PV is blowing up. Globally, 77.2 GW of new PV capacity was installed last year, up 52 percent over 2015. In the US, 14.6 GW of new PV capacity was installed, a jump of 90 percent over 2015.

In 2016, solar PV revenue in the US grew $5.7 billion (30 percent), to a total of $24.9 billion.

us solar power growth (AEE)

After years of flailing around in response to the sporadic renewal of federal tax credits, wind power has steadied out a bit, holding firm at $14.1 billion. Also in power, energy storage rose rapidly (54 percent!) last year, albeit to a still relatively shrimpy total of $427 million in revenue.

In transportation, clean diesel was down sharply (45 percent) due to the Volkswagen scandal. Ethanol also took a beating, down $7 billion (24 percent) from last year on the back of cheap oil and corn, despite production staying roughly steady.

But sales of plug-in electric vehicles (PHEVs) were up $2.5 billion (48 percent), neatly filling the hole left by diesel. (PHEVs seem to be eating into hybrid electric sales, which are down for the third straight year.) Investment in charging infrastructure is up 11 percent over last year — up 600 percent since 2011 — but still anemic relative to the need, at $182 million.

2016 in advanced energy
2016 was a good year for advanced energy.

It’s not a culture war, it’s an industry

There are different ways of viewing the industry than AEE’s, but just about any way you slice it, the story is the same: rapid growth and lots of jobs.

Similar numbers can be found in other recent reports. The Sustainable Energy in America 2017 factbook (from the Business Council for Sustainable Energy and Bloomberg New Energy Finance) is chock-full of good news.

The Solar Foundation recently released the Solar Jobs Census 2016, which reports that solar employment was up by 51,000 workers (25 percent) in 2016 — 2 percent of all new jobs created in the US in 2016. At year’s end, there were 260,077 solar workers in America. (By way of comparison, coal mining, transportation, and power plant combustion together account for about 174,000 jobs.)

The latest quarterly market report from the American Wind Energy Association (AWEA) reports that wind just overtook hydro as the largest source of renewable energy capacity in the US. There was $13.8 billion in investment in wind farms in 2016, 99 percent of which went to rural areas.

And so on, for energy storage, smart energy management, electric vehicles, microgrids, and the rest of the swarm of industries and technologies changing the energy landscape — together they represent one of the fastest-growing economic sectors in the world economy.

It is puzzling, then, that energy plans from Donald Trump and the Republican Party scarcely mention the industry, much less do anything to support it. They still seem to view it as some sort of liberal social program, part of the culture war.

The numbers say otherwise.

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