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Top States Promoting Alternative Energy

Our research team reviewed all 50 states across 5 core metrics to see which states are the best in their utilization and advancement of alternative energy. The top three overall for 2016 were Oregon, New York, and California.

 

Overview of Research

Our team spent over 40 hours researching state alternative energy for this 2016 ranking.  We collected 26 types of federal data and then categorized them into five core metrics to use when ranking each state, weighing them depending on how important we thought they were in the promotion of alternative energy.  The five core metrics for our ranking, as identified by our research team, are: Production (35%), Efficiency (25%), State-Wide Goals (15%), Vehicle Efficiency (15%), and Incentives and Standards (10%).

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Top States Promoting Alternative Energy

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Introduction to Alternative Energy

The term ‘alternative energy’ comes from its original definition as an alternative energy source to fossil fuels. Its meaning has since expanded to any energy type that is renewable or produced without the harmful environmental side effects associated with fossil fuels. This is a broad category that covers many different types of energy. Here are some of the most common alternatives to fossil fuels.

Types of alternative energy

  • Biomass Energy: Biomass energy is obtained from burning plant material or animal waste.
  • Geothermal Energy: Geothermal energy is obtained by utilizing the heat emanating from the Earth itself.
  • Hydroelectric Energy: Hydroelectric energy is obtained by using moving water (usually through a waterfall created by a dam) to power a turbine.
  • Hydrogen Energy: Hydrogen energy is a direct energy source where power is produced from burning liquid hydrogen.
  • Solar Energy: Solar energy is the conversion of sunlight into electricity, either directly through photovoltaics or indirectly through concentrated solar power.
  • Tidal Energy: Tidal energy converts the energy contained within ocean tides into electricity. These work similarly to more traditional hydroelectric power, in that they use the moving water to power a turbine.
  • Wind Energy: Wind energy is the utilization of airflow through wind turbines to create electricity.

Methodology

How we selected which data to use in our methodology

We started by reviewing some existing rankings on alternative energy, such as Ecomagination’s Top Ten U.S. States for Renewable Energy Installed Capacity and Triple Pundit’s Top 10 Renewable Energy Producing States. These rankings were a good start for research, but their methodologies were too narrowly focused on the largest power caches and total energy production, a statistic that favors larger states. Their rankings did not take into consideration the finer details of state alternative energy promotion, which is what want our ranking to do.

We expanded our search, focusing mainly on official government websites to insure the data we acquired was as accurate as possible. Examples of government sources include the US Department of Energy’s Alternative Fuel Data Center, which shows current alternative energy laws and incentives sorted by state, and the US Energy Information Administration’s Alternative Fuel Vehicle Data report, which details the consumption of alternative fuel in a state’s vehicle fleet.  After spending time deciphering what reliable data was available for all 50 states, we finally settled on our 26 key data points.  These included production statistics, laws and policies, and vehicle fleet statistics, all straight from primary sources such as the Energy Information Administration the US Department of Energy, or the Database for State Incentives.  

There are a few drawbacks to our methods. Because of the data available, we were only able to cover five alternative energy types: biomass, geothermal, hydroelectric, solar, and wind.  Additionally, energy production data is not updated every year, so the most recent statistics we could find were from 2009.  We were also not able to cover other, less common alternative energy sources such as tidal power. This ranking also does not track certain indicators of clean energy usage, such as Co2 emissions or energy consumption rates.

We grouped our 26 key data points as sub-metrics into five core metrics.  This was to simplify how we would calculate our rankings and allows us to weight certain metrics over others, depending on how important they are to the promotion of alternative energy in the United States.

Since the focus of our ranking is rating the top states that promote alternative energy, we chose the production of alternative energy, measured in thousand british thermal units per capita, as our most important core metric.  Our second most important metric is Efficiency, which measures what percentage of the state’s total production is renewable. The Efficiency metric rewards states that are ultimately contributing most to the goal of 100% alternative energy.  The remaining metrics are detailed below.

Our methodology breakdown:

Metric 1: Production (35% of final score)

Metric 2: Efficiency (25% of final score)

  • Efficiency: the percentage of yearly state production that is renewable

Metric 3: State-Wide Goals (15% of final score)

Metric 4: Vehicle Efficiency (15% of final score)

Metric 5: Incentives and Standards  (10% of final score)

  • Alternative Energy Generation Disclosure Laws: requires that utilities provide their customers with information about the energy they are supplying
  • Interconnection Standards: provides technical protection requirements, equipment specifications, application procedures, and other standards to ensure that renewables can be efficiently and safely interconnected to the grid
  • Equipment Standards: standards to ensure quality of equipment and installation
  • Contractor Licensing Requirements: ensures that contractors have the necessary experience and knowledge to install alternative energy systems
  • Construction Standards: building code standards for solar installations, design standards, and performance requirements
  • Personal Tax Deductions: covers a portion of the expense of installing alternative energy equipment
  • Corporate Tax Incentives: allows corporations to receive tax deductions or credits for a portion of the expense of alternative energy equipment
  • Sales Tax Incentives: provides exemption or reduction from the state sales tax when purchasing alternative energy equipment
  • Property Tax Incentives: the added value of an alternative energy device over the cost of a non-renewable device is included in the valuation of the property for taxation purposes
  • Grant Programs: available for alternative energy research and development
  • Loan Programs: offers low cost financing for the purchase of alternative energy equipment
  • RPS Energy Cost Cap: indicates the state’s renewable energy portfolio’s maximum cost

How we scored our methodology

After grouping the sub-metrics into their core metrics, we assigned each a score of 0-10. The sub-metric scores were determined by ranking each state against each other in that data point. The state with the best performance in that sub-metric was awarded a 10, while the state with the lowest performance was given a linear ranking depending on how many states scored in that sub-metric.  States that did not have anything in that sub-metric were given a 0.

For example, in the sub-metric solar energy production, Hawaii produced the most with 1944 thousand BTUs per capita and was awarded a 10 for that sub-metric. Tennessee and Mississippi tied for the least, producing 6 thousand per capita and were given the score of 0.3. Alaska and Wyoming both produced 0 and they received a score of 0. The final core metric scores were determined by averaging each sub-metric score (so all sub-metrics were weighted evenly).

Here’s an example of how our #1 overall state, Oregon, scored an 8.1/10 for the core metric Vehicle Efficiency. The Vehicle Efficiency metric is made up of four sub-metrics; here’s how Oregon scored for each one:

  • Availability of Alternative Fuel Stations – 9.8/10
  • Renewability of Electricity – 9.2/10
  • Alternative Fuel Vehicles in State Fleets – 6.6/10
  • Alternative Fuel Consumption in State Fleets – 6.8/10

Once the sub-metrics were averaged, we took each state’s score on the five core metrics, applied the weights detailed in the previous section, and calculated the end ranking.

Understanding Our Metrics

What is important for alternative energy promotion and why?

1. Production back to metric

Very Important

35.00% of our methodology score

The metric Production ranks states based on how much alternative energy they produce each year.  This metric is weighed the heaviest because a state’s ability to promote alternative energy stems from their ability to produce and provide that energy to citizens.  Our Production sub-metrics rank states on five different energy types: hydroelectric, solar, wind, biomass, and geothermal.  

To score these sub-metrics, we took their yearly alternative energy production, measured in British thermal units, and divided it by the populations of each state, giving the highest scores to the states with the most production.

Limitations: The most recent alternative energy production source was Energy.gov from 2009.  To ensure that changing state populations did not confuse our rankings, we used Census.gov data from the same year to reach our final per capita rankings.

Highest Scoring States in Production
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2. Efficiency back to metric

Very Important

25.00% of our methodology score

Efficiency ranks states based on how much of a state’s total production is renewable.  This metric rewards the states that are the furthest along on the path to 100% renewable energy production.  The Efficiency core metric only has one sub-metric, which we also named efficiency.  To score this sub-metric, we ranked each state based on the percentage of their production that came from renewable sources. This resulted in a five-way tie for first, where each of our top states production is 100% alternative energy.

Our Efficiency metric is limited in the same way as our production metric, as the most recent Energy.gov data we used was also from 2009.

Highest Scoring States in Efficiency
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3. State-Wide Goals back to metric

Somewhat Important

15.00% of our methodology score

State-Wide Goals is designed to reward states for their proposed alternative energy objectives.  We rated this metric as important because it allows us to rank states based on their projected paths as well as their current status. The four sub-metrics we have selected for State-Wide Goals are: state portfolio alternative energy goals, the maximum portfolio price increase for consumers, alternative energy public benefits funding, and state net metering policies.

A state’s renewable energy portfolio indicates a certain percentage of a state’s electricity has to be from renewable sources by a given year. For example, Minnesota’s portfolio states that providers need to source 25% of their electricity from renewable energy by the year 2025.  We ranked states with portfolio goals based on the average percent increase per year that would be required to meet their goals, giving states without renewable portfolios a 0.  In the previous example, Minnesota established their portfolio in 2007, which means that they would need to average a 1.4% increase per year to meet their goals.

Some states include along with their portfolio goals a maximum allowed price increase for electricity to ensure that the cost of alternative energy does not fall squarely on the shoulders of the consumer.  We ranked these by the percentage increase allowed, with the lowest percentage states receiving the highest score.

We also evaluated states based on the amount of funding invested in alternative energy public benefit funding, ranked as a percentage of the state’s utility revenue.  This money is usually spent on the promotion or research and development of alternative energy.

Finally, we measured each state based on their policies about net metering, a practice where companies or individuals can sell extra renewable energy back to the state if they have a surplus.  Net metering helps to allay the sometimes unpredictable nature of alternative energy by incentivizing energy highs and providing support for when energy values may be lower.  This is important in making alternative energy practices economical. We ranked states in this category based on how much energy the states were willing to buy annually.

Highest Scoring States in State-Wide Goals
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4. Vehicle Efficiency back to metric

Somewhat Important

15.00% of our methodology score

For Vehicle Efficiency, we wanted to measure how well each state promotes alternatively fueled vehicles.  We rated this metric as important because vehicles are a substantial source of power draw in the United States, and alternatively fueled vehicles are a promising way to alleviate some of this power usage.  To determine how states were doing, we identified four sub-metrics: availability of alternative fuel stations, renewability of electricity, alternative fuel vehicles in state fleets, and alternative fuel consumption in state fleets.  Each contributes in different ways to alternatively powered vehicles.

Alternative fueling stations are important to the owners of alternatively fueled vehicles, so we ranked states by the percentage of their fuel stations that provide alternative fuels. We also ranked states based on the renewability of their electricity because it directly influences the renewability of electric vehicles in the state.

Our final two metrics rank government vehicle fleets on their alternative energy use.  For the first metric, alternative vehicles in state fleets, we measured the total number of alternatively fueled vehicles, and divided by the state population to get our final ranking.  For alternative fuel consumption in state fleets, we did the same thing, except with the amount of alternative fuel consumed by the fleet measured in thousand gasoline equivalent gallons.

Highest Scoring States in Vehicle Efficiency
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5. Incentives and Standards back to metric

Somewhat Important

10.00% of our methodology score

This core metric measures how well states incentivize alternative energy use in the public sphere.  Incentives and Standards are valuable in ranking states’ promotion of alternative energy because they encourage growth of alternative energy beyond state projects.  We judged this metric as somewhat important because we determined that incentives have the least amount of overall impact on alternative energy promotion compared with our other core metrics: Incentives are not as important as alternative energy production or state portfolio goals, so we weighted this metric accordingly.

Limitations: Ranking the states based merely on whether they have a law in a particular category does not take into consideration the quality of the laws or how much they pay in incentives, but due to the difficulty of comparison between laws that award different incentives or rebates for different alternative energy practices, we thought it necessary to simplify in order to create a meaningful comparison.

To score Incentives and Standards, we reviewed the Database of State Incentives for Renewables and Efficiency, and determined the 12 most common categories of state alternative energy incentives and standards: generation disclosure rules, interconnection standards, equipment standards, contractor licensing requirements, construction standards, personal tax deductions, corporate tax deductions, sales tax deductions, property tax deductions, grant programs, and loan programs.  These became our sub-metrics.

After sorting incentives into these 12 sub-metrics, we ranked states based on whether they had a law in each category.  For example, New Mexico has laws for RPS energy cost cap, interconnection standards, construction standards, personal tax deductions, corporate tax deductions, and property tax incentives, for a total of 6 out of a possible 12 categories.  This means that New Mexico tied for fourth and received a 6.7 in this metric.

 

Highest Scoring States in Incentives and Standards
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Editor's Awards

With the most alternative energy production per capita out of any state and a close runner-up in efficiency, Oregon is our top state promoting alternative energy.

Oregon is known for its extensive hydroelectric power on the coast and formidable solar power in the eastern part of the state, ranking 3rd and 6th in these categories overall.  Oregon also sets an excellent example in alternative energy efficiency, with renewable sources making up an impressive 99.8% of Oregon’s total produced energy.  The state provides alternative fuel at more than one third of its total fueling stations, and two thirds of its electric power is provided by alternative sources.

Drawbacks:

  • Oregon has conservative portfolio energy goals compared to our other top states
  • Net metering in Oregon is severely limited

Ranking Results:

  • Production: 7.9/10
  • Efficiency: 9/10
  • State-Wide Goals: 4.8/10
  • Vehicle Efficiency: 8.1/10
  • Incentives and Standards: 6.7/10



California is the forerunner in vehicle efficiency.

California has the largest alternative energy fleet in the United States, employing more than twice as many alternatively fueled vehicles as New York, the state with the next largest fleet.  Even accounting for California’s large population, its alternative energy fleet is the second largest per capita of any state.  That fleet has a greater alternative energy use than any other state fleet and is supported by a top-tier alternative fuel infrastructure. For example, 38% of California fuel stations offer alternative energy.

Apart from vehicle efficiency, California also boasts the second largest total alternative energy production of any state and is top 10 in our per capita ranking.  California has some of the most extensive state laws detailing its future goals and pours massive amounts of money (roughly $235 million a year, or 1.4% of its utility revenue) into incentivizing and promoting alternative energy.

Drawbacks:

  • Even though California produces the 2nd most alternative energy of any state, its alternative energy production is only 24% of its total energy production

Ranking Results:

  • Production: 6.1/10
  • Efficiency: 5.4/10
  • State-Wide Goals: 6.2/10
  • Vehicle Efficiency: 9.3/10
  • Incentives and Standards: 7.8/10



Washington contributes the largest alternative energy power cache in the United States and is a powerhouse in hydroelectric energy.

Washington is the largest producer of alternative energy in the United States, totaling approximately 826 trillion BTU’s every year, with around 86% of that coming from hydroelectric sources.  Its hydroelectric energy production alone is greater than the total alternative energy production of any other state.  Washington also receives top marks for its vehicle efficiency, with 30% of its stations offering alternative fuel. Finally, 73% of its electricity is renewable.  This makes California the second-best scoring state for that metric.

Drawbacks:

  • Washington is lacking in its solar and wind production, ranking in the bottom 20 states for each category
  • Washington’s renewable portfolio goals are lower than other high ranking states
  • Washington does not have alternative energy public benefit funding
  • Washington’s has a low net metering policy

Ranking Results:

  • Production: 6.3/10
  • Efficiency: 8.4/10
  • State-Wide Goals: 2.6/10
  • Vehicle Efficiency: 8.4/10
  • Incentives and Standards: 5.6/10



Hawaii has 100% alternative energy production and the highest energy portfolio target of any state.

Hawaii lacks in some areas, such as vehicle efficiency, but it is the only state to officially strive for 100% renewable energy consumption. On top of already producing 100% alternative energy, Hawaii endeavors to use only renewable resources for power by 2045.  The next most ambitious states in regards to a total renewable energy conversion are Vermont, New York, and California, with 75%, 50% and 50% alternative energy goals respectively.  Hawaii’s incentives are also some of the best according to our metrics.  

Drawbacks:

  • Hawaii’s state fleet is far behind in terms of renewability
  • Hawaii has not set a maximum price increase for energy
  • Hawaii has no funds involved in alternative energy public benefit
  • Hawaii has a low net metering policy

Ranking Results:

  • Production: 5.7 /10
  • Efficiency: 10/10
  • State-Wide Goals: 3/10
  • Vehicle Efficiency: 3.6/10
  • Incentives and Standards: 7.8/10



New York’s top-mark incentives combined with its ambitious portfolio goals make New York a strong promoter of alternative energy.

New York received the highest score for our core metric Incentives and Standards, with laws enacted for 9 out of the 12 categories of alternative incentives included in this metric. This makes New York incentives as comprehensive as any state; it has generation disclosure laws, RPS energy cost caps, interconnection standards, construction standards, personal, corporate, sales and property tax incentives, as well as loan programs for alternative energy projects.  New York also incentivizes alternative energy with the sixth largest net metering policy out of any state.

New York compliments this comprehensive policy program with impressive portfolio goals, striving for 50% alternative energy usage by the year 2030, while keeping energy price increases to below 1.7%.  

Drawbacks:

  • New York’s production scores are not in the top ten for any of the five energy types we reviewed
  • Only 18% of its stations offer alternative fuel, which is lower than other high-ranking states

Ranking Results:

  • Production: 4.7 /10
  • Efficiency: 7.4/10
  • State-Wide Goals: 6.3/10
  • Vehicle Efficiency: 8.4/10
  • Incentives and Standards: 10/10

Last Updated on May 25, 2016

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