About West Virginia

Report published: May 31, 2017

Extensive research and more than 20 interviews with stakeholders and experts in West Virginia helped the American Jobs Project identify industrial energy efficiency as showing particular promise for economic development in the state.

Industrial energy efficiency is a versatile and growing sector that features a variety of technological applications and services for energy and cost savings for large energy-consuming facilities. Moreover, developing the energy efficiency sector can enable technological innovation, thereby elevating West Virginia’s companies in the marketplace and creating good jobs for West Virginians.

West Virginia is well-positioned to benefit from rising global demand for industrial energy efficiency products given its large industrial manufacturing base, which includes chemical and energy efficiency manufacturers; several research institutions conducting cutting-edge research on fuel and energy efficiency; a readily available workforce; and attractive incentives for businesses. Opportunities to leverage these strengths to further serve growing regional, national, and global markets offer real benefits for the state economy and West Virginia’s residents.

However, there are several barriers hindering West Virginia’s energy efficiency industry and preventing its supply chain companies from reaching their full potential. These barriers range from inadequate access to capital for innovators and entrepreneurs looking to start a business in the advanced energy sector to limited energy efficiency incentives targeted at the unique needs of industrial customers. West Virginia must address these roadblocks in order to become a competitive hub for energy efficiency.

To take full advantage of these opportunities, leaders can pursue strategies to create a strong foundation for industry growth and help West Virginia businesses grow, innovate, and outcompete regional, national, and global competitors. With forward-thinking policies, West Virginia’s energy efficiency industry could support 6,100 direct, indirect, and induced manufacturing and supply chain jobs annually through 2030.

Summary of Policy Recommendations

The analysis presented in this report culminates in recommendations for West Virginia’s leaders based on best practices in the United States and abroad. Each recommendation identifies opportunities to remove barriers and grow the industrial energy efficiency sector. While the recommendations are intended to be complementary and would be especially powerful if adopted as a package, each can also be viewed as a standalone option.

Value ChainValue Chain

Partner with Industry Associations to Create Energy Efficiency Industry Working Group: Leverage the strong existing industry associations in West Virginia to expand awareness of the state’s emerging industrial energy efficiency cluster.

Strengthen and Expand West Virginia’s Foreign Direct Investment Strategy: Establish West Virginia as an international hub for industrial energy efficiency manufacturing.

Create an Anchor Company Tax Credit: Provide in-state anchor companies with strategic incentives to help recruit companies to the state to bolster the industrial energy efficiency supply chain.

Innovation EcosystemInnovation Ecosystem

Leverage Philanthropic Funding Via a Foundation Liaison: Partner with private foundations to fund advanced energy incubators and university programs devoted to industrial energy efficiency.

Co-Sponsor a Hackathon to Ignite West Virginia’s Entrepreneurial Culture: Promote and grow an innovation culture within West Virginia’s research institutions.

Encourage Commercialization of Cutting-Edge Research: Streamline the commercialization process for small businesses, researchers, and entrepreneurs to facilitate more rapid technology transfer to market.

Access to CapitalAccess to Capital

Develop Relationships with Foundations Engaging in Program-Related Investment: Leverage the resources and missions of large, national foundations to support in-state advanced energy companies.

Create Tax Incentives for Investment in Startups: Provide a capital gains tax exemption to investors in West Virginia’s small businesses to foster growth.

Coach Businesses on How to Solicit Capital: Train entrepreneurs to create effective pitches to raise capital.

Establish a State Fund of Funds to Stimulate the Investment Environment: Reduce investment barriers for early-stage companies by improving access to long-term capital.

Workforce DevelopmentWorkforce Development

Support Career-Connected Learning: Expand opportunities for career-connected learning through early college programs and youth apprenticeship programs to increase the number of skilled graduates.

Encourage High School Partnerships with Community and Technical Colleges: Provide students with the resources necessary to better understand all their postsecondary education options.

Align Community College Efforts with Private Sector Needs: Create strong partnerships between employers and local community colleges to increase the number of skilled workers in the state and ensure that students have the skills necessary to succeed in today’s economy.

Local marketCreate a Local Market

Offer Industrial Energy Efficiency Tax Incentives to Manufacturers: Reduce the upfront cost of energy efficiency investments while also encouraging manufacturers to expand and upgrade facilities.

Participate in a Regional Energy Efficiency Organization: Tap into regional network-based organizations to advance West Virginia’s industry potential through information sharing and collaboration.

Incentivize Industrial Energy Efficiency Using Energy Performance Indicators: Establish energy efficiency targets as a way to encourage utilities to invest in load reduction practices such as energy efficiency and lower the financial burden on ratepayers in the long run by reducing utility investments in new generation.

Implement a Utility Energy Efficiency Resource Standard: Establish energy efficiency targets to reduce the financial burden on ratepayers.

Enable Local Energy and Efficiency Partnership Programs for Commercial and Industrial Energy Efficiency: Establish a comprehensive energy financing option to help industrial customers who want to invest in energy efficiency equipment.