Introduction

WASHINGTON—The global transition to clean energy will hinge on developing and adopting new innovations that drive price and performance improvements in a diverse array of clean energy sources and uses. States and regions have important roles to play in that effort, bringing resources to bear through geographically concentrated networks of technology and service firms, research institutions, and nonprofit and public sector entities.

On that score, Vermont, South Dakota, and Alaska are the top-performing U.S. states, according to a new index compiled by the Information Technology and Innovation Foundation (ITIF). The index assesses the potential contributions and output of state and regional energy innovation ecosystems across nine functional categories using indicators such as federal and private research funding, scientific and engineering publications and patents, and state and regional policies and public opinion. At the regional level, Staunton and Stuarts Draft area near Charlottesville, Virginia, emerges as the top performer, followed by the Burlington area in Vermont, and Lynchburg, Virginia.

“Vibrant regional energy innovation ecosystems are important for any national net-zero strategy,” said ITIF Senior Fellow David M. Hart, who coauthored the new report. “Congress passed landmark bills in 2021 and 2022 to support states and regions seeking to strengthen their energy innovation ecosystems. Quite a few states and regions had already begun to do so before Congress created these new federal programs, and many more are now responding to these opportunities. ITIF’s State and Regional Energy Innovation Index, while inevitably imperfect, provides a baseline against which to measure the future impact of recent federal legislation.”

The index assesses 9 categories of clean energy innovation system functions and 14 areas of technological specialization in all 50 states plus Washington D.C., as well as 382 metropolitan statistical areas (MSAs).

ITIF released the index with a summary report and interactive data visualization tools that provide detailed profiles of each state and region. An overview of the best and worst performers follows.

Table 1: Top and bottom states and their strengths and weaknesses

Table 2: Top and bottom regions and their strengths and weaknesses

Economic development organizations in the United States are increasingly cognizant of the potential benefits of clean energy innovation, and the recent federal legislation has amplified that awareness and provided resources to act on it. To further enhance the prospective impact of the new federal programs, ITIF offered a series of policy recommendations:

▪ The federal government should continue to support the development and implementation of innovation-based state and regional development strategies, including those relying on clean energy innovation.

▪ Federal programs supporting state and regional economic development strategies should continue to use evaluation criteria that enable clean energy innovation.

▪ Federal agencies should support data collection and related research that enable state and regional economic development strategists to make better-informed decisions about the growth potential and resource and asset requirements of industries drawing on clean energy innovation.

▪ Federal programs supporting state and regional economic development strategies should strengthen coordination among themselves to reduce the administrative burdens on applicants to these programs and to ensure the programs are mutually complementary.

“Regional innovation ecosystems have the potential to become vital engines of the global transition to low-carbon energy,” said Chad A. Smith, a doctoral student at George Mason University’s Schar School of Policy and Government, who co-authored the study. “Creating and strengthening agile, geographically proximate learning networks of research institutions, suppliers, and producers, loosely coordinated by public and nonprofit regional organizations, offers a promising pathway to drive price and performance improvements in many specialized domains of clean-tech production and use.”

Read the report and explore the data visualizations.