The Next Generation of
Energy

The Renewable Energy and Energy
Efficiency Industries in Washington State

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5. Overview of the Energy Efficiency and Renewable Energy Industries in Washington

Our review of the energy efficiency and renewable energy industries identified 274 relevant firms located in Washington state, divided almost evenly between the two industries (See Table 3 below). Together, energy efficiency and renewable energy companies comprised nearly a billion-dollar industry, with an estimated $924 million in revenue in fiscal year 1997. Though the number of firms in each industry is nearly equal, energy efficiency companies represent the majority of the revenues (84 percent of the total for both industries), wages (80 percent), and total employment (76 percent). [Note 9]

Energy Efficiency

According to our study, the energy efficiency industry in Washington includes about 134 firms employing nearly 3000 people. Estimated revenues for 1997 were about $780 million, and total wages paid were $128 million. More than one-third of the companies are energy service companies (ESCOs) and related engineering firms providing a range of services to industrial, commercial, residential, and institutional clients seeking to reduce their energy use. These companies also contributed about 55 percent of the energy efficiency industry’s revenues and 45 percent of its employment. Companies producing control devices and lighting products represented the next two largest sectors, respectively constituting 16 and 15 percent of energy efficiency revenues. However, these figures may be overestimated because companies in these fields tended to report all their business activity as related to energy efficiency, though their definition may be overly broad.

Renewable Energy

Our assessment identified 134 firms involved in various sectors of the renewable energy industry in Washington state. In 1997, estimated revenues for these firms totaled $147 million, and the companies employed about 900 workers. The renewable energy industry in the state covers a range of areas from biomass to small-scale hydroelectric to wind, but most sectors are fairly small, consisting of only a few small companies with relatively low revenues and employment. Solar energy is a significant exception to this pattern. The sector consisting of solar thermal energy, photovoltaics, and related energy storage systems and power inverters contributed nearly half (48 percent) of the total for renewable energy. Two major manufacturers — Siemens Solar Industries, a producer of photovoltaic solar cells, and Trace Engineering, manufacturer of inverters that convert DC to AC current — comprise a large portion of the sector, but numerous smaller solar device producers, distributors, and other related companies make solar energy a significant industry in Washington.


Table 3. Washington's Energy Efficiency and Renewable Energy Firms, 1997

		Firms	Revenues	% of	Wages	Employees	% of
		#	(thousands $)	Subtotal	(thousands $)	#	Subtotal

Renewable Energy
	Biomass, Biofuels, Muni. Solid Waste	26	54,240	37%	11,940	325	36%
	Electric Vehicles	6	3,026	2%	570	16	2%
	Geothermal	10	124	0%	12	0	0%
	Small-scale hydroelectricity	21	15,452	11%	5,384	119	13%
	Solar, Elec. Storage, Inverters	69	71,083	48%	13,692	424	47%
	Wind	6	2,255	2%	903	20	2%
	General	2	635	0%	202	3	0%
	Subtotal	140	146,815	100%	32,703	907	100%

Energy Efficiency
	Consultants	11	4,553	1%	1,382	38	1%
	Controls	13	122,347	16%	13,089	308	11%
	Electrical Suppliers and contractors	19	56,980	7%	13,022	333	11%
	Energy Service Companies (ESCOs)/Engineers	47	430,901	55%	67,814	1,292	45%
	Heating, Ventilation, Air Conditioning (HVAC)	8	17,558	2%	5,025	106	4%
	Lighting	16	116,233	15%	20,952	652	23%
	General	20	28,343	4%	6,593	165	6%
	Subtotal	134	776,916	100%	127,877	2,895	100%

Total		274	923,731		160,580	3,802
	Energy Efficiency as % of Total	49%	84%		80%	76%

Source:Industry databases, ES202 data, and B&O tax data assembled by ECONorthwest

In the biomass category (37 percent of the renewable energy total), Pyro Industries and Travis Industries are two major pellet stove manufacturers that anchor employment and revenues for their diverse sector, which also includes some forest product companies and a few industrial equipment manufacturers. Small-scale hydroelectric activities are in decline, and geothermal is essentially nonexistent. The wind energy sector is small at present, but it is ripe for expansion as the next generation of high-tech wind turbines develops. Fuel cell companies are not included in the total, but several are currently researching this promising technology, though no commercial products are yet available.

For many renewable energy companies, estimates of current revenues and employment may not adequately represent the industry’s potential contribution to the Washington state economy. For example, wind energy is currently close to competing with natural gas in terms of electricity generation costs, and the next generation of advanced wind turbines, currently under development in Washington with the support of federal funds, may help foster a stronger and larger market. Likewise, fuel cell technologies are primarily in developmental stages in Washington. They have not yet been commercialized, but if effective products are developed, they may help create a significant future market.

Note 9. Industry databases, ES202 data, and B&O tax data assembled by ECONorthwest.

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The print version of The Next Generation of Energy: The Renewable Energy and Energy Efficiency Industries in Washington State will be available soon. To order, contact Tony Usibelli at (360) 956-2125, or send e-mail to wepg@ep.cted.wa.gov.