How Is the Green Energy Boom Creating Jobs and Reshaping the American Economy?

Why Are Traditionally Republican States Leading the Charge in Clean Energy Production?

Explore the $3 trillion economic shift in Clean Economy Now by Bob Keefe. Discover how federal investments are fueling an electric vehicle boom, creating 1.5 million jobs, and transforming the climate crisis into a massive business opportunity for the United States .

Ready to profit from the largest economic shift since the New Deal? Read the full summary below to uncover the emerging business trends driving America’s clean energy revolution.

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A green energy boom isn’t a pipe dream — it’s happening right now, journalist-turned-advocate Bob Keefe reports in this eye-opening work. Clean energy is a crucial part of the American economy, and Keefe advises readers not to become distracted by partisan posturing. Texas isn’t just home to EV maker Tesla, he notes; it’s also a major producer of energy from the wind and sun. Keefe offers up a compelling overview, along with a call to set aside the political histrionics when it comes to the green economy.

Take-Aways

• The US economy is in the midst of a green energy boom.
• Federal funding for clean energy passed despite some Democrats’ opposition.
• The current federal investment in green energy represents the largest public outlay in US history.
• Before President Obama’s election, the United States mostly ignored green energy.
• Mainstream automakers have embraced the EV trend.
• Energy-efficient homes present a growth opportunity.
• Fusion power is growing closer to reality.
• The early adopters of clean technology are largely affluent.
• Climate leadership is coming from unexpected places.
• The green revolution has widened the political divide.

Summary

The US economy is in the midst of a green energy boom.

Some $3 trillion will move into clean energy by 2032. This massive investment is expected to create 1.5 million new jobs. At the same time, America’s power grid will get much greener — wind energy and solar energy will supply more power, and electric vehicles will become commonplace. The groundwork for this boom was laid from 2009 to 2019, a period when the costs to produce solar power, wind power, and lithium-ion batteries plunged. The pace only picked up in 2021 and 2022. With the passage of the Inflation Reduction Act, the Biden administration placed a new emphasis on clean-burning vehicles.

“Not long ago, shifting to a clean economy meant pain and cost. Now, it means opportunity, profit, and savings.”

The mindset around clean energy has changed, as reflected by the industry’s explosive growth. Embracing greener practices once was a fringe strategy that business owners felt was being foisted on them. Solyndra and other high-profile, publicly funded green projects collapsed, tarnishing the broader industry. Now, clean energy is seen as a smart way to do business, in large part because of the success of Tesla. General Motors, Volkswagen, and BMW are among the manufacturers ramping up production of EVs in the United States.

Federal funding for clean energy passed despite some Democrats’ opposition.

In 2021, the Biden administration was pushing for the Build Back Better Act, a package that would provide $3.5 trillion in infrastructure spending. The Squad — a group of progressive House members led by Alexandria Ocasio-Cortez — voted against the bill because it didn’t include their priorities for social programs. But enough Republicans supported it that the bill was poised to pass narrowly. Then came a last-minute defection from Senator Joe Manchin, the then-Democrat from West Virginia. Appearing on Fox News shortly before Christmas, he said, “If I can’t go home and explain it to the people of West Virginia, I can’t vote for it.”The Senate was deadlocked at 50-50.

“[Manchin] wasn’t necessarily against clean energy. But he was against anything that hurt coal and the rest of the fossil fuel industry.”

Manchin came under intense lobbying from the White House and fellow Democrats. Bill Gates asked him to support the measure. Manchin continued to waffle, in part because he thought a federal investment in clean energy would hurt his home state’s coal industry. Manchin wanted fossil fuel projects to win federal approval, including the Mountain Valley Pipeline that was proposed to carry natural gas through West Virginia. After months of back and forth, Manchin agreed to support the Inflation Reduction Act and its green energy subsidies if he got some compromise on the Mountain Valley Pipeline.

The current federal investment in green energy represents the largest public outlay in US history.

The Biden administration passed three major packages aimed at economic growth. The climate and energy spending in the Inflation Reduction Act totals some $370 billion, while the Infrastructure Investment and Jobs Act calls for $163 billion in spending. The CHIPS and Science Act earmarks an additional $280 billion for semiconductor infrastructure, something that’s imperative for the growth of the US EV industry. In all, that’s more than $800 billion, which means it’s bigger than the 1930s New Deal, which totaled about $793 billion after inflation adjustments. This spending also eclipses that for John F. Kennedy’s moonshot and for Dwight D. Eisenhower’s interstate highway system.

“Government investments and incentives are just the kindling to light an economic fire.”

It would be inaccurate to characterize this government investment as a giveaway. Rather, the idea is to position the United States for future growth and sustainability. For instance, significant subsidies are structured as tax credits. A company needs to make an investment in green energy to reap the rewards of the program. The goal is to create a multiplier effect that allows the public investment to cascade throughout the economy. And if the investment goes as planned, the United States will bring back offshore manufacturing by transforming itself into the cheapest place on the planet to produce wind turbines, solar panels, and electric vehicles.

Before President Obama’s election, the United States mostly ignored green energy.

For decades, America paid little attention to the clean economy. Solar and wind were afterthoughts, and nations such as Germany and Spain had moved far past the United States in research and capacity. That changed when President Barack Obama and his vice president, Joe Biden, swept into the White House in 2009. They promoted clean energy, including $90 billion in green energy spending in the American Job Recovery and Reinvestment Act. However, it took years for the new approach to bear fruit. Now states such as Mississippi, Louisiana, Iowa, and Georgia are home to thriving green economies.

“Part of the reason for the gold rush in clean energy is simple supply and demand.”

The explosion of green energy is something of a self-propelling cycle. As EVs multiply on US roadways, the American electric grid needs to adapt to the new reality. “I can’t emphasize enough: We need more electricity,” Elon Musk said. And the best way to do that is with more solar farms and more wind turbines. The response from the domestic solar industry has been robust. Solar farms have popped up in rural Mississippi and Georgia.

Mainstream automakers have embraced the EV trend.

Back in the 1990s, General Motors took a shot at an electric vehicle, coming up with the unattractive EV1. GM sold barely 1,000 units and killed the experiment. Fast forward to today, and GM is all in on EVs: It plans to produce 30 EV models by 2035, including a Cadillac and a Hummer. Other major auto brands are doing the same — mass-market brands Hyundai, Honda, and Volkswagen all make EVs. So do luxury marques, including Porsche, Bentley, and Jaguar. Ford has been especially aggressive on this front; it’s spending billions on battery plants in Michigan, Kentucky, and Tennessee.

“Federal tax credits for new battery and car factories are making it the best time to build a new EV factory in America.”

The EV boom is being driven in large part by massive public subsidies. Car makers get tax credits to build EV factories. And consumers get $7,500 tax breaks for buying new EVs. As a result, in 2023, the longstanding champion of US car sales, the Toyota Camry, was unseated by a Tesla model. It’s not just federal incentives that are boosting EV sales; states also are pushing purchases in that direction. The leader is California, which in 2002 enacted its own emissions standards. More than a dozen US states have followed suit.

Energy-efficient homes present a growth opportunity.

Just as cars are shifting from being gas-fired to battery-powered, so are homes and buildings. Berkeley, California, in 2019 became the first US municipality to prohibit natural gas connections to new buildings. The impetus is partly environmental — water heaters, furnaces, and other appliances would become cleaner if they operated on electricity provided from renewable sources. Another factor was at play: Berkeley sits on a fault line, and it’s possible that an earthquake would break a natural gas line and spark a fire. Berkeley was followed by dozens of other California cities that moved to replace natural gas with electricity.

“That potential has the otherwise boring business of heat pumps sizzling.”

A big beneficiary of this trend could be heat-pump manufacturers such as Carrier. Government subsidies are incentivizing homeowners and landlords to replace gas-fired furnaces with electric heat pumps. A Bloomberg News headline summed up the trend: “Who Wants to Become a Heat-Pump Billionaire?” The move hasn’t been all smooth sailing, though. The California Restaurant Association sued to block Berkeley’s ordinance, and in 2023 an appellate court ruled against the city. Even so, the state of New York in 2023 passed a statewide prohibition on gas in new buildings. The underlying motivation is that 15% of global greenhouse gases are belched out by buildings’ HVAC systems.

Fusion power is growing closer to reality.

The Holy Grail of clean energy is fusion, a method of unlocking energy that creates no pollution. In late 2022, researchers at the Lawrence Livermore National Laboratory in Northern California produced the first fusion reaction that generated more energy than went into the procedure. The successful proof of concept led to considerable excitement about the future of fusion as an energy source. The private sector also is getting involved. In 2022, $3 billion in private funding was directed at start-ups working on fusion. The details are still being worked out. Some researchers use lasers to produce fusion, others are testing high-powered magnets.

“Most fusion companies aren’t expected to have a product ready until after 2030.”

While the recent breakthroughs have been promising, a dose of reality is in order. Mastering fusion will be expensive, and real progress likely will take years, even decades. The concept of fusion energy has captured the public imagination since the 1980s, when the mad scientist in the Back to the Future series used “Mr. Fusion” devices to power time travel. Despite decades of little progress, there’s much to recommend the concept. According to Seattle-based Zap Energy, just an ounce of its fusion-based fuel can generate as much electricity as 25 tons of coal.

The early adopters of clean technology are largely affluent.

There’s an obvious economic divide in the new wave of clean energy products. The typical owner of a Tesla Model 3 is a white male with a household income of more than $130,000. In 2021, the income for a household that had installed solar panels was $110,000, well above the national average. By contrast, poor people in the United States are more likely to absorb the costs of clean energy. For instance, a lithium mine in Nevada was allowed to begin development over the objections of the local Paiute, Shoshone, and Bannock tribes, which live near the mine.

“Just like the technology revolution, the clean energy revolution so far has been something primarily for rich, white people — people who can afford to put solar panels on their rooftops and park a Tesla in their garage.”

To even out some of the inequalities, the federal government has included provisions for racial equity. The Infrastructure Act requires grant recipients to spell out how they’ll deliver economic and environmental benefits to long-neglected communities. And the Department of Energy is working to recruit diverse workers and innovators to the clean energy sector. Much work remains: White men dominate the labor force in the clean energy industry, and for female entrepreneurs and entrepreneurs of color, raising capital can seem an impossible task. But for the clean energy revolution to fulfill its promise, diversity is crucial.

Climate leadership is coming from unexpected places.

While the federal government has been an important supporter of clean energy, making real progress will require the cooperation and leadership of states. That’s already happening — and in some surprising locales. For instance, in 1983, Iowa was the first state to require electric companies to generate at least some power from green sources. Now, wind accounts for fully 60% of the power produced in the reliably Republican state.

“The role of states in the clean economy revolution is critical.”

Iowa isn’t the only unlikely state driving America’s green revolution. Massachusetts is another example. Geographically small, Massachusetts has an outsized place in the clean economy. Its 113,000 workers in green energy make up the seventh-highest number of such employees among the states. South Carolina offers another example — the state has recruited more than a dozen companies in the EV and battery space that have brought in billions in investments and thousands of jobs.

The green revolution has widened the political divide.

Not everyone is on board with the green revolution, of course. In 2023, the Republican Party of Texas issued an official resolution claiming the federal government is waging “a war on fossil fuels, which is a war on the citizens and the economy of Texas.” In truth, Texas is a huge entity in green energy. It’s the largest producer of wind energy among the US states and the second-most prolific producer of solar power. Tesla is headquartered in the state.

“The partisan divide over climate change is still incredibly wide.”

The vitriol isn’t confined to the Lone Star State. In Wyoming, GOP lawmakers proposed banning sales of EVs. In Ohio, Republican legislators approved a law that lets municipalities ban solar and wind projects. And in Florida, Republican governor Ron DeSantis clapped back at natural gas bans by signing a law that keeps natural gas flowing to the state’s buildings. In some cases, though, common sense has prevailed. Republican leaders realize, at least privately, that clean energy is an important economic driver. But partisan bickering remains a roadblock to the clean energy revolution.

About the Author

Bob Keefe is executive director of E2, a national nonpartisan organization. He is the author of Climatenomics: Washington, Wall Street and the Economic Battle to Save Our Planet.