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Hub is 7th in alternative energy jobs

By Kaivan Mangouri
Globe Correspondent / July 13, 2011

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Greater Boston ranks in the top 10 among the nation’s largest metropolitan areas for employment in the alternative energy industry, boosted by state policies that require utilities to purchase electricity generated by solar, wind, and other nonpolluting power sources, according to a new study.

The study, by the Washington think tank Brookings Institution, found that Boston ranks seventh among the 100 largest metro areas with nearly 4,300 alternative energy jobs, accounting for the vast majority of the state’s employment in this emerging industry. Massachusetts has just over 5,000 alternative energy jobs, placing it 11th among states, according to the Brookings report to be released today.

The number of jobs in the alternative energy industry has grown 6.4 percent in Massachusetts since 2003, according to the report.

“The Boston area is one of the real clean-technology pulls in America,’’ said Brookings senior fellow and policy director Mark Muro. “Massachusetts has a very balanced, strong clean-tech set of clusters that are reaching critical mass and fertilizing each other, propelled by outstanding research institutions and a history of entrepreneurial prowess.’’

California, with about 30,000 jobs in the industry, and New York, with about 15,000 jobs, topped the ranking among states. The leading metropolitan areas were San Francisco; Albany, N.Y.; and Knoxville, Tenn.

A study released by Governor Deval Patrick’s administration this week said the prospects for job growth, lower energy bills, and reduced greenhouse gas emissions justify state-mandated investment by utilities - a projected $5.37 billion through 2015 - in alternative energy, including energy efficiency. Utilities that operate in the state are required to purchase at least 6 percent of their supply from renewable sources such as wind and solar.

The Massachusetts Clean Energy Center, a quasi-public agency aimed at accelerating growth in the industry, estimates that the state’s alternative energy sector is significantly larger than Brookings estimates. The council counts 400 companies in manufacturing, energy efficiency services, and research and development in the sector employing about 11,000 workers - a 65 percent increase from 2007.

The numbers differ because Brookings takes a narrower view of which firms constitute the industry, counting jobs only at companies that solely produce alternative energy goods and services. Nonprofits and university researchers, for example, are excluded from the Brookings estimates. Brookings also excludes firms with fewer than five employees.

Public and private investment are fueling the alternative energy industry. In Massachusetts, for example, utility customers pay a small surcharge on their bills to provide about $25 million annually to the Massachusetts Renewable Energy Trust Fund, which invests in new technologies.

In all, utilities and their customers paid $500 million in 2010 to fund energy efficiency programs. That money, according to the state Department of Public Utilities, could yield about $1.4 billion in savings for utility customers over the long term.

Venture capital firms, many in Massachusetts, are also investing in alternative energy firms. Muro, the Brookings report author, suggested a hybrid model that combines public and private investment to help commercialize alternative energy technologies.

One example, he said, is Connecticut’s recently approved “Green Bank,’’ a quasi-public lending program that will combine funding from private and public sources to provide low-interest financing to alternative energy projects.

“You need financial support to grow great technology,’’ Muro said. “It’s hard to get bank financing to scale-up a cool, promising, but risky new technology.’’

K aivan Mangouri can be reached at kmangouri@globe.com.