The retail sector is the surprising leader in U.S. green investments. This is according to the Clean Investment Monitor by Rhodium Group and the Center for Energy and Environmental Policy Research at the Massachusetts Institute of Technology. The publication has been collecting data on investments by the retail, energy and industry as well as the manufacturing sectors, looking at production and purchases of EVs, the expansion of green energy capacity and carbon management as well as investments in battery technology, energy storage and heat pumps, among others.
In Q2 of 2024, the retail sector in the U.S. invested almost $33.6 billion in green technology or clean energy—ahead of the energy and industry sector at $23.5 billion. Manufacturing came third at $19.2 billion. Retail’s spending focuses on EVs and other zero emission vehicles, giving the sector an accessible and easy-to-implement way to invest in clean energy. In the other sectors, more expensive and tailor-made solutions might at times make investments more difficult or take more time, potentially explaining some of the lag. However, manufacturing investments have been rising more steeply recently. The change is tied to big investments in battery manufacturing in the United States that started to take off towards the end of 2022.
As a result, manufacturing investments more than quadrupled in the past two years compared to the two years before that. Retail as well as energy and industry investments have been rising slower but more steadily over the years. This is with the exception of the past two quarters for the latter sector, when investment volumes sank. The change was due to fewer investments in wind and solar. According to the source, big declines in the wind energy sector were tied to higher interest rates, supply chain problems as well as siting and permitting issues. More money was invested in the smaller subsectors of energy storage, clean hydrogen and carbon management, however.
California EVs A Major Driver
The state leaders in the retail space were Oklahoma, California and Maine, investing between 1.06% and 0.74% of their GDPs in green energy and related fields. In absolute terms, California’s retail investment in EVs stands out and at $25.6 billion in the four quarters between Q3 2023 and Q2 2024 made up 20% of the nation’s retail green investments in that time period. Of course, vouchers and incentives available for EV purchases in California propped up this number.
Manufacturing’s battery investments in the same time span were largest in Georgia, Michigan, North Carolina and Tennessee due to investments by LG, Toyota, Hyundai and others. Samsung, General Motors and Stellantis also propped up investments in more Great Lakes states. While investments were smaller in Nevada, the state still topped the list in terms of spending as a share of GDP after more money flowed towards Tesla’s Reno Gigafactory. The only major investments in the energy in industry sector in between the second half of 2023 and the first half of 2024 took place in Texas for solar energy and storage and to a smaller degree in California, where storage investment dominated. In relative terms, wind, solar and carbon management investments in Wyoming, West Virginia and New Mexico were the largest in comparison to the states’ GDPs.
Charted by Statista
