Sacramento Business Journal – by Melanie Turner Staff writer

Friday, August 27, 2010

A study to better define the region’s clean-energy technology “cluster” has identified 231 companies in the sector — and researchers aim to build a more complete, longer list.

“What we’re hoping to do as we’ve garnered so much attention on the topic now is to further refine that,” said Ryan Sharp, executive director for the Center for Strategic Economic Research in Sacramento. “We should be able to learn about more companies and put some more meat on the bones of our cluster analysis.”

Sharp revealed preliminary findings of the study, which covers six counties, at a Valley Vision meeting Tuesday.
The findings indicate that most of the region’s companies are small, with between one and 19 employees. The region’s cluster had significant growth between 1998 and 2008. Sales increased 224 percent, the number of companies grew by 123 percent and employment in the cluster improved almost 87 percent.

Started early this year, the study’s next steps include in-person outreach to companies on the list to inquire about their peers, and outreach to local jurisdictions. By late fall, researchers hope to reveal a more complete list and an accompanying map.

Because the industry sector is an emerging one, it’s tough to define — and compare to other regions.
The federal Bureau of Labor Statistics is putting together industry classifications and data that relate to the green economy, Sharp said. Just as we can look at data for sectors within the manufacturing industry, from semiconductors to software, it’s anticipated that data for the clean-energy technology industry will be standardized across the country, he said.

But not yet.

“The latest I’ve heard is 2012,” he said.

Developing a regional strategy

For now, grant funding is helping the region define its green and clean cluster.

In February, the Sacramento Employment and Training Agency secured a $200,000 Regional Industry Clusters of Opportunity grant through the California Workforce Investment Board to develop a regional strategy to sustain — and build on — the clean-energy sector.

SETA put together a project team, including Valley Vision, the Center for Strategic Economic Research and the Los Rios Center of Excellence, to develop the strategy.

The first phase includes figuring out how many companies are in the sector.

Researchers identified four segments of the green economy from which to derive the list. The segments, viewed as those that give the region a competitive advantage, include clean energy, energy efficiency, clean transportation and green building.

“We’re looking for companies that have primary business activities related to one of these segments,” Sharp said.
For example, renewable energy companies such as Solar Power Inc. would fall under the clean-energy segment. Companies such as Beutler Corp. fall into the energy efficiency segment, and Siemens Mobility Division is in the clean transportation segment. ZETA Communities is in the green building segment.

Clean energy and energy efficiency are by far the largest of the four segments in the region.

The University of California Davis Center for Regional Change assisted the research team in its analysis. So far, researchers have gathered economic performance data on 70 percent of the 231 companies.
“Overall, we’re doing quite well,” Sharp said. “We’re one of the leaders in the country.”

A leader in clean-tech

The study is just one part of a regional effort under way to sustain and build on the region’s clean-energy sector.
Independent studies recently have identified the Sacramento region as a clean-tech cluster leader.
Sacramento County has the seventh-most clean-tech companies in the state, with 145, according to an Environmental Defense Fund report released this month.

And the region led the state with 87 percent job growth in the green sector between 1995 and 2008, with 4,743 jobs added for a total of 13,102 in 2008, according to Collaborative Economics, on behalf of Next 10.

“I think you have an abundance of assets here,” said Tracey Grose, who presented findings of the Collaborative Economics report at this week’s Valley Vision meeting.

Grose said she would attribute Sacramento’s 87 percent green-job growth in part to “regional engagement.”
The more Sacramento can position itself as a clean-energy leader, the more it will attract companies in that sector, she said.

Matt Mahood, president and chief executive officer for the Sacramento Metro Chamber, agreed.
“As a region we do have some very unique competitive advantages,” he said. “We need to do a better job of using our megaphone.”

The Metro Chamber has been doing its part to nurture the sector. In 2008, for the first time the chamber created a separate cap-to-cap green team to lobby specifically for the green and clean-tech sector. Regional leaders lobbied to extend the solar tax credit, for example.

Meanwhile, researchers also are working to compare Sacramento’s clean-energy cluster to other regions, including Portland, Ore., Denver, Austin and the Bay Area. Sharp outlined some of those findings Tuesday. When compared to the four other regions, Sacramento is strong in some areas and weak in others. Innovation, measured by patents, is not a strong point.

But Sacramento is in the “middle of the pack” when it comes to its Leadership in Energy and Environmental Design portfolio, and number of LEED professionals.

Sacramento also is doing well in attracting federal stimulus funding related to clean-energy technology. The region is second only to Austin, with $255 per capita, according to the study.

Sacramento also boasts a strong level of installed photovoltaic capacity, with 127 kilowatts per 10,000 population. That puts it behind only the Bay Area, which has a reported 198 kilowatts per 10,000.

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