Michigan Governor Nurtures a Budding Green Economy

For a sneak peek at where a U.S. energy revolution could be going, keep an eye on Michigan. That's right, rust-belt Michigan. In the same financially struggling state where the Big Three automakers are kings, Gov. Jennifer Granholm is nurturing a microcosm of the green economic development President Obama envisions for the nation.

Granholm, an Obama advisor, described her clean energy vision for Michigan’s immediate future in her State of the State Address last night.

If she succeeds, she could turn chilly Michigan into one of the most energy efficient and renewable energy-reliant states in the nation. In the process, her plan could create tens of thousands of jobs, expand the tax base and begin to resurrect Detroit. Her target is this:

By the year 2020, Michigan will reduce our reliance on fossil fuels for generating electricity by 45 percent. We will do it through increased renewable energy, gains in energy efficiency and other new technologies. Instead of spending nearly $2 billion a year importing coal or natural gas from other states, we’ll be spending our energy dollars on Michigan wind turbines, Michigan solar panels, Michigan energy-efficiency devices, all designed, manufactured and installed by Michigan workers.

The state’s aggressive tax incentives for renewable energy production have already started drawing wind and solar enterprises to Michigan. The next step in Granholm's plan is to ignite a powerful new market for those Michigan-made products.

The state could do that, she said, by:

• letting every homeowner and business sell excess energy from their rooftop solar panels and wind systems back to their power company.
• changing how rates are set so utilities benefit from energy efficiency rather than waste. “Unlike the coal we buy from Wyoming and Montana, money we spend on energy efficiency will produce tens of thousands of jobs in Michigan,” Granholm said. If state government can successfully cut energy use by 23 percent in three years with Michigan-made products, “you can too.”
• putting thousands of people back to work this year weatherizing 100,000 homes and installing energy efficiency and renewable energy technology in 1,000 buildings.
• creating a Michigan Saves program in partnership with utilities to help people weatherize homes and businesses and install Michigan-made energy efficiency technology with zero up-front charges. The monthly savings would pay the cost of the improvements.
• directing the Department of Environmental Quality to evaluate both the need and all feasible and prudent alternatives before approving any new coal-fired power plants. The same day she gave her address, Granholm put seven plans for coal-fired plants on hold.

The governor warned that Michigan's economy will get worse before it gets better, but she assured residents that it would get better. For autoworkers worried about the products that make Detroit the Motor City, she added:

We will keep Michigan positioned as the global center of an increasingly green auto industry.

The success of renewable energy and energy efficiency programs in other states should be encouraging. California is the prime example. Since 2005, the number of green jobs in California has grown 10 times faster than the state's total job growth.

In Oregon, a new study of state energy tax credits shows just how lucrative investing in renewable energy and energy efficiency can be.

Over a 22-month period ending in October, Oregon approved $244 million in tax credits for such things as high-efficiency appliances and cooling systems, solar panels and hybrid cars. Those credits helped to generate more than $616 million in wages and investments, plus a $22 million increase in the tax base and 1,700 new jobs.