Market Overview

Decade of Data Charts California's Emissions Reductions Amidst One of Longest Economic Expansions in State History


Policies drive record-setting investment & innovation, but
transportation emissions keep rising

Riverside takes top regional ranking for residential solar
installations, as San Diego slips

In advance of the Global Climate Action Summit, a new study tracks the
difference a decade can make in climate action. The tenth edition of the California
Green Innovation Index
 presents robust findings of emissions
reductions and economic growth, while highlighting critical challenges

The Index compares state and environmental indicators with the
U.S. and the rest of the world, and finds that in the ten years since
California passed its first climate law, emissions fell by 11 percent,
even as its economy grew by almost 16 percent during one of the longest
economic expansions in the state's history. In comparison, the U.S.
economy grew by 11.6 percent during this period, while emissions
decreased by 10.2 percent. The European Union (EU-28) was the only major
economy to cut emissions more than California, but its real economic
output grew by only 8.8 percent.

"This year's Index tells a comprehensive but complex story of the
transition to a decarbonized economy," said F. Noel Perry, businessman
and founder of Next 10. "On the one hand, California is a world leader
in innovation and climate policy, which has resulted in strong economic
growth and emissions reductions. On the other hand, population growth,
oil prices and increased commutes are driving transportation emissions
up at a time when the federal government is attempting to curtail our
ability to control those emissions. As subnational, national and
international leaders gather in San Francisco, this Index
provides important data and impetus for increased collaboration across
state and national lines in the transition to a clean energy economy."

"Over the course of a decade, comprehensive, consistent policy in
California created market certainty. That drove investment and advanced
technology. California is third only to China and the U.S. as a whole in
attracting clean technology investment," said Adam Fowler, director of
research at Beacon
, the independent research and consulting firm that
compiled the Index for Next 10. "But progress doesn't always
follow a straight line. Both California and the U.S. have experienced
dips in VC investment and a decline in patent generation in the past
year, while some of our major economic competitors have seen increases.
Command of clean technology markets may well determine economic success
in the 21st century, so it's not a time to slow down."

Top statewide findings from the 2018 Index include:

Cleantech innovation

  • California has generated more than $22 billion in clean technology
    venture capital investment from 2007 to 2017 and is third only to the
    U.S. as a whole and China.
  • In 2017, $2.5 billion was invested in clean energy technology in the
    United States, with 57.2 percent ($1.4 billion) going to California
    • Transportation technologies received the largest share [$610
      million in US; $459m in CA].
  • California on its own produced more than 5 percent of the world's
    clean tech patents in 2017, making it the fifth largest global
    • The U.S. (including California) produced 29 percent of global
    • The EU-28 produced 20 percent of global patents, followed by Japan
      (13 percent), South Korea (6 percent), California (5.4 percent)
      and China (4 percent).
  • However, California and the U.S. saw a decline in patents in
    2016-2017, while the world saw an 11.2 percent gain.
    • EU-28, which ranks second globally for most clean tech patents,
      saw a surge of over 40 percent from 2016-2017, while Japan and
      South Korea (spots 3 and 4, respectively) declined.
    • California leads the nation in clean tech patents [18.6% ]
      followed by Texas [6.5%], New York [5.5%], Michigan [5.1%] and
      Massachusetts [4.2%].
  • Globally, the number of clean technology patents increased 243.8
    percent between 2007 and 2017.
    • The number of patents produced in California increased 342 percent
      in this period.
  • From 2015 to 2016, total capacity for thermal energy storage systems
    and battery energy storage systems in California increased more than
    threefold, representing a major surge in storage growth.

Renewable energy

  • California has increased its renewable electricity generation (from
    in-state and out-of-state sources) by 130 percent compared to ten
    years ago.
  • Solar has been the dominant driver in increasing renewable electricity
    generation in California. The state's cumulative solar capacity stands
    at almost 6,000 GW—an almost 2,500 percent increase compared to ten
    years ago when it had a mere 227.6 GW of cumulative capacity.
    • But for the first time in Index history, new capacity
      installed did not exceed the previous year. In 2017, new net
      energy metering (NEM) solar photovoltaic (PV) capacity was
      1,1,34.4 MW, down 10.5 percent from 2016.
  • Wind generation remains the largest renewable energy source in
    California when including imports. Despite having one of the lowest
    average wind speeds compared to other states, California had the 18th
    highest share of electricity generated from wind in 2016.
    • In 2016, in-state electricity generation from wind totaled 13,499
      GWh, a 10.7 percent increase compared to 2015. Compared to ten
      years ago, cumulative wind capacity installed is up by 128 percent.
    • On the other hand, capacity decreased by 107 MW between 2016 and
      2017, bringing California's cumulative wind capacity down to 5,555
      MW as of the end of 2017.
  • In 2016, California had a Renewable Energy Portfolio standard goal of
    25 percent; it reached 25.5 percent of total electricity generation,
    up 3.6 percent compared to 2015.
    • At this pace, California is poised to meet its 2020 RPS goal of 33
  • In 2017, all three investor-owned utilities were far ahead of the
    state's RPS goals. RPS generation was 33.7 percent, 33.9 percent, and
    46.3 percent for PG&E, SCE, and SDG&E, respectively.
  • Globally, renewable energy generation increased 339 percent between
    2005 and 2015, led primarily by a massive boom in solar electricity as
    technologies improved while costs fell.
    • Solar generation increased globally by 6,327 percent, while wind
      power increased 701 percent.
    • China's solar generation increased by a whopping 61,049 percent,
      followed by India (29,584 percent), EU-28 (7,235 percent), and the
      U.S. (4,424 percent).


"The data show a formidable challenge when it comes to reducing
emissions from the transportation sector. Cars are getting cleaner in
California, but transportation emissions still increased in 2016 because
there were more cars on the road, and more miles driven," commented
Perry. "California has been investing in solving that challenge for
years – building a strong industry around clean transportation that
could command the worldwide transportation market. The question is
whether the federal government gets in the way. Federal challenges to
California's authority to set vehicle emission standards pose not just
an emissions risk, but an economic risk as well."

Emissions Increase

  • In 2016, California's transportation sector accounted for 40.5 percent
    of the state's total greenhouse gas emissions — the highest percentage
    since 2006. On-road passenger vehicles accounted for 68.4 percent of
    the transportation sector's GHG emissions.
  • California's population grew 9.2 percent from 2006 to 2016, resulting
    in over three million more vehicles registered over the time period.
  • Vehicle miles traveled (VMT) reached a record high of 340 billion in
    2016. Lower oil prices and longer commutes due to rising housing costs
    are chiefly to blame.
  • Public transportation ridership fell for the second year in a row.
    Compared to 2016, total trips dropped 4.2 percent.
  • Emissions from light-duty vehicles shot up in 2016, as did emissions
    from heavy-duty trucks, while overall heavy-duty emissions were 13.1
    percent below 2008's level, due in part to cleaner buses.

California leads nation in cleaner vehicles; China leads the world

  • But it's not all bad news. For the first time in state history,
    conventional internal combustion engine vehicles fueled by gasoline
    and diesel accounted for less than 90 percent of all on-road vehicles
    registered in California in 2017.
  • California sold about 47 percent of all electric vehicles ever sold in
    the U.S. and the number of zero-emission vehicles (ZEVs) registered in
    California rose 38.6 percent between 2016-17.
    • China accounted for 49 percent of total ZEV sales [2017] – the
      most in the world, and double the number of ZEV sales in Europe,
      the next top adopter.

Other highlights of California's clean economy

  • Between 2015 and 2016, California's total GHG emissions fell 2.7
    percent, primarily due to electricity generation GHG reductions.
    • To meet the state's 2030 emission reduction goals, California will
      have to achieve just over 4 percent annual declines between
  • California's dependence on electricity from natural gas fell 18.3
    percent in 2016 compared to the previous year.
  • California ranks 18th among world's top 50 polluters
    [2015], and has the world's fifth largest economy.
  • Per capita electricity consumption decreased 14.1% between 2005-2015
    in California, and 21.2 percent since 1990, despite the proliferation
    of electronic devices.
    • National per capita consumption was down 9.5 percent since 1990.
  • Despite having one of the highest electricity rates per kilowatt hour,
    California's average monthly residential electricity bills were 15.4
    percent lower than the national average in 2016 due to decades of
    investment in energy efficiency and a temperate climate.
  • The carbon intensity (emissions relative to GDP) of the California
    economy continues to decline, with emissions of 0.165 MTCO2e
    per $1,000 of GDP generated in 2016, a 5.5 percent improvement
    compared to 2015 and a 23.6 percent improvement over 2006.
  • California is one of the least carbon-intensive states. California's
    emissions from fossil fuel consumption per dollar of GDP dropped by 42
    percent between 1990 and 2015.
  • In 2015, California generated $3.29 of GDP for every 10,000 British
    Thermal Units of energy consumed, while the rest of the U.S. generated
    $1.75 of economic output for the same amount of energy consumed.
  • Nationwide in 2017, electricity production from coal slipped by 3
    percent while renewable production (excluding conventional hydropower)
    increased 4.8 percent compared to 2016.
  • In 2016, California had an RPS goal of 25 percent; it reached 25.5
    percent of total electricity generation, up 3.6 percent compared to
    2015. At this pace, California is poised to meet its 2020 RPS goal of
    33 percent.
    • Twenty-nine states and Washington, D.C. now have RPS policies in

Regional rankings

The California Green Innovation Index breaks out how different
parts of the state are performing in terms of clean energy, clean
technology innovation, and other aspects of the clean economy.

Santa Rosa, for example, shot from 23rd place to first in
terms of industrial-sector solar installations, while San Francisco rose
from 17th to 2nd place. Overall, industrial-sector
solar installations declined significantly between 2016 and 2017.

Riverside, which was in third place for residential solar last year,
rose to first place, swapping places with San Diego, which slipped from
first to third. Visalia-Porterville took top honors in commercial solar,
rising from sixth place last year, while San Diego retained the
number-two spot.

Regional highlights of this year's Index include:

Clean Vehicle Rebates

  • An income cap that increased lower-income incentives for clean vehicle
    rebates took effect Nov. 1, 2016; as a result, there were more clean
    vehicle rebates per capita in lower-income regions and less in
    higher-income areas in 2017 compared to 2016.
  • Los Angeles-Long Beach-Anaheim maintained its top spot for clean
    vehicle rebates with 19,562 in 2017, an increase of 11.2 percent year
    over year.
  • San Francisco-Oakland-Hayward and San Jose-Sunnyvale-Santa Clara
    maintained their second- and third-place rankings, respectively, but
    with respective declines of a 3.3 percent and 14 percent compared to
  • On a percentage basis, smaller, inland metros saw the largest
    increases in 2017: Visalia-Porterville (+215%), Hanford-Corcoran
    (+85%), and Chico (+66%).
  • On a per capita basis, San Jose-Sunnyvale-Santa Clara held onto the
    top spot, with 2.9 rebates per 1,000 people. Santa Rosa-Petaluma
    overtook the San Francisco region to finish second, with 2 rebates per
    1,000 people.

Commute Time by Driving

  • Workers who drive alone continued to see their commute times increase
    across California.
  • Drivers in Santa Maria-Santa Barbara had the lowest average commute
    time in 2016, spending just 18.3 minutes behind the wheel. Workers
    from Redding (19.6 minutes) and Hanford-Corcoran (20.6 minutes) also
    enjoyed relatively short commutes.
  • Drivers in large metro areas spent the most time driving to and from
    work. Workers in Riverside-San Bernardino-Ontario had the longest
    average commute of 31.6 minutes, which is likely due to the increased
    number of "super commuters" (who spend more than 90 minutes commuting)
    to the Los Angeles-metro area. Stockton-Lodi (31 minutes) and San
    Francisco-Oakland-Hayward (30.4 minutes) had the next-longest average
    commute times.

Public Transportation

  • Unlinked passenger trips (UPTs) on public transportation (defined as
    trips on one transit vehicle, not including connections) continued to
    decline throughout California.
  • Hanford-Corcoran is the only MSA where public transportation trips per
    capita have increased for four consecutive years.
  • San Francisco-Oakland-Hayward still had, by far, the highest rate of
    public transit ridership (98 per capita) in 2017; however, it has
    fallen below 100 UPTs per person for the first time since 2011.
  • Los Angeles-Long Beach-Anaheim had the next highest number of UPTs per
    capita at 42, a 5.9 percent decrease compared to 2016. San
    Diego-Carlsbad, which finished third with 30 UPTs per capita, recorded
    a 4.4 percent decline compared to 2016.

Solar PV Capacity

  • Sunny Southern California metro areas had the most solar photovoltaic
    capacity installed in 2017.
  • Riverside-San Bernardino-Ontario added the most solar PV capacity in
    2017 with 173.4 megawatt (MW) of capacity installed across all sectors
    combined, followed by Los Angeles-Long Beach-Anaheim with 152.2 MW
    installed and San Diego-Carlsbad with 135.4 MW installed.
  • Riverside was number one in the state for residential and solar
    installations, beating out San Diego, which slipped from number one to
    number three in residential solar capacity in 2017.
  • Cumulatively, Los Angeles-Long Beach-Anaheim had the highest solar PV
    installed with 866.1 MW as of the end of 2017, followed closely by
    Riverside-San Bernardino-Ontario (828.3 MW) and San Diego-Carlsbad
    (770.8 MW).
  • On a per capita basis, however, the Central Valley had the most per
    capita solar PV capacity installed. In 2017, Madera had the most
    capacity installed per person (0.14 MW/person), followed by
    Visalia-Porterville (0.13 MW/person) and Hanford-Corcoran (0.11

About Next 10

is an independent, nonpartisan organization that educates,
engages and empowers Californians to improve the state's future. With a
focus on the intersection of the economy, the environment, and quality
of life, Next 10 employs research from leading experts on complex state
issues and creates a portfolio of nonpartisan educational materials to
foster a deeper understanding of the critical issues affecting our state.

About Beacon Economics

 is one of California's leading economic research
and consulting firms. Through its Sustainable Growth and Development
practice, Beacon partners with policymakers, communities, businesses,
and elected officials to data-drive discourse and decision-making
processes around sustainability, economic growth, and equity. Beacon
leverages its quantitative and qualitative competences as well as its
policy-related expertise to help clients translate their goals into
measurable metrics for success.

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