North Andover-based Nexamp installs Evergreen Solar panels at a Weymouth Bank branch. (Greg Derr, 2009 photos)
At first glance, this sure seemed like a dirty year for the clean-energy sector in Massachusetts. It began with a shutdown order at Evergreen Solar’s publicly-subsidized Devens plant, and ended with Tyngsboro-based Beacon Power’s trip to bankruptcy court.
Most of the headlines were grim. But they only told part of the story.
The truth is, the green energy industry is still thriving in Massachusetts, with more than 60,000 people either working for alternative energy companies or within other firms as staffers assigned to energy-related tasks. A researcher who polled these companies on behalf of the quasi-public Massachusetts Clean Energy Center found that the industry’s overall employment grew by about 7 percent from July 2010 to July 2011. He says that growth rate – more than tripling the state’s overall job growth – is expected to continue for at least another year.
The diverse nature of the state’s clean energy sector helped cushion the blow of a few high-profile setbacks in 2011. Evergreen Solar is by far the most famous. The company accepted millions of dollars in state aid to build a solar panel factory in Devens, one that would employ as many as 800 people. But competition in China – a place where government-backed financing flows like water – was impossible for Evergreen to overcome.
There were other disappointments. Battery firm Boston-Power gave up on a manufacturing plant here, shifting most of its operations to China. AMSC, a provider of components for wind turbine firms, sliced 20 percent of its workforce following a legal dispute with a key customer – from China, of course.
At least Chinese competition wasn’t the main problem for Beacon Power, which makes flywheels that can be used to store electricity and stabilize grid operations. Still, the company was forced to sell its Stephentown, N.Y., plant to quickly pay back a federal energy loan.
Philip Jordan of BW Research Partnership, the lead author of the Mass. Clean Energy Center report, says blow-ups in a nascent sector like clean energy are a fact of life. Jordan says “innovation economies” are often marked by failures, with companies and investors taking chances on unproven technologies.
China can’t do much to hurt what’s probably the biggest source of clean-tech jobs in Massachusetts right now: installation services. Jordan’s report showed that installation and maintenance work accounts for roughly a third of the state’s green jobs. Many of these jobs can be found among construction contractors branching into solar panels and HVAC efficiency, among other projects. Jordan says state policies and utility-backed programs in Massachusetts have played a key role.
There are still a number of factors that make the Boston area a fertile ground for green industries. There’s the big-name research universities, and the projects and ventures that spin out of them. There’s the concentration of private equity firms that can provide the capital and know-how to help young firms commercialize their technology. Even the high electricity prices here can be an advantage, to some extent, by ensuring a market for new and innovative ways to use energy more efficiently.
Peter Rothstein, president of the New England Clean Energy Council, says tax credits, loan guarantees and other government incentives remain important. The industry’s technology – from wind turbine connections to high-tech car batteries – is still being refined, and Rothstein says the capital necessary to get some of these projects off the ground can be daunting. But he says his group’s members fully expect that most of these subsidies will eventually go away and the industry will stand on its own without government help.
If there’s one big disappointment, it’s that Greater Boston and Massachusetts are easily being outpaced by many other metro regions and states. A Brookings Institution report released this year showed that the Boston area ranked eighth out of the 100 biggest metro areas based on our total number of clean-tech jobs, with an estimated 42,000 positions in 2010. But the region’s average growth rate in clean energy jobs from 2003 through 2010 was only 3 percent, compared to a national average of 4.2 percent. Statewide, the rate was 3.3 percent over the same time, roughly the same as the nation’s.
If Jordan’s polling is any indication, the sector’s growth could already be accelerating at a much faster pace than what was indicated in the Brookings report. Jordan says the clean-tech firms in his survey expect to grow their employment, in one year, by an average of 15 percent by next summer. Jordan says that’s probably overly optimistic. But he says it wouldn’t be unreasonable to assume that the sector as a whole will match or exceed the 7-percent growth rate it enjoyed in the past year.
A year ago, we had high expectations for Evergreen and Boston-Power. Those obviously didn’t work out like we had hoped. But there are other firms that are still growing. Look at Harvest Power, a Waltham-based organic waste recycler that landed $58 million in financing this year. Or Boston-based First Wind, which added 136 turbines among four of its wind farms in 2011. Or Next Step Living, a three-year-old Boston firm that makes homes more energy-efficient and employs a couple hundred people.
Sure, there were a few high-profile disasters and debacles in the clean-tech field this year. But there have also been many successes that didn’t attract much attention – victories big and small that continue to leave our alternative energy sector well-positioned for the future.
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