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US Manufacturers Missing Out on Wind and Solar Energy
Clean Energy Deserts: The US States Where Manufacturers Are Missing Out On Wind and Solar Energy
The U.S. has ambitious plans to stop using fossil fuels for energy by 2035, and is aiming for 80% renewable energy generation by 2030. But this is an enormous task considering how many energy-intensive businesses there are around the country. The industrial sector alone accounted for 35% of total energy consumption in the US in 2022 – with a mighty 76% of this coming from manufacturing.
ESG (Environmental, Social and Governance) strategies are driving manufacturers to look for new ways to cut carbon emissions from their supply chains, and wind and solar power are increasingly seen as a force for change.
In North America alone, the wind power market is expected to grow at a 7.34% compound annual growth rate (CAGR) between 2024 and 2029 – partly bolstered by private sector investment of more than $180 billion in new or expanded clean energy manufacturing projects.
The Inflation Reduction Act, passed in 2022, is also providing $369 billion over a ten year period to promote clean energy – including tax incentives for wind. It resulted in wind turbine manufacturers restarting operations and expanding factories nationwide.
Wind and solar are a major contributor of renewable energy for manufacturers – but are some states in the U.S. being held back from clean energy sources because of a lack of clean energy generation?
To find out, manufacturing software provider, ECI Software Solutions, crunched the numbers and discovered that some states are in danger of becoming clean energy deserts due to the lack of wind turbines and solar energy generation.
The average factory uses 9000 MWh of energy per year, which works out to 750 MWh per month - three times the average US residential consumption.
Factories and industrial plants often use far more energy due to the need to operate heavy machinery, lights and facility heating and ventilation.
The key takeaways
- Alabama has some of the lowest rates of both wind or solar energy generation, despite being in the top ten states for industrial sector energy consumption.
- Kentucky, Louisiana and Tennessee have limited to no access to commercial wind energy generation, with less than ten megawatt-hours (MWh) of renewable energy per manufacturing business - just 1% of what’s needed to power a factory each month.
- North Dakota is leading the charge with 1,650 MWh of renewable energy generated, per month, per business - more than enough to power two factories per month.
Made in the USA: Where is the biggest deficit of clean energy for manufacturers in the U.S.?
Renewable energy is crucial for global sustainability, and the American manufacturing industry in general.
And yet, the sector remains heavily dependent on the availability of raw materials used to make solar panels and wind turbines, and geographical availability.
Although there are other sources of renewable energy, such as hydropower, or biomass, wind power is currently the largest producer of renewable electricity in the U.S. - but not all states can access it.
For example, in Florida there isn’t enough wind power to sustain wind turbines in the Sunshine State - on and offshore, according to the federal government. And for solar in North Dakota, despite the state having more hours of sunlight than anywhere else along the Canadian border, it also has very short days in the winter - when electricity is in greater demand.
ECI Software Solutions collected data from the Bureau of Labor Statistics to find out the number of manufacturing businesses in each state, before comparing this with monthly wind energy generation, in MWh. The optimal distance from a wind turbine to buildings is between 700 and 1,200 meters.
ECI Software Solutions also looked at the net generation for solar energy, according to the U.S. Energy Information Administration by thousand megawatt-hours, by month, for every single state, to reveal the average amount of renewable energy generated per business (wind and solar), by MWh. As a reminder, the average factory uses 9000 MWh of energy per year, which works out to 750 MWh per month
Data was taken from the most recently available month, of November 2023, when daylight would be lower than summer months.
Clean energy deficit
| State | Total Renewable Energy from Solar or Wind | Number of Manufacturers | Monthly Renewable Energy Generated per Business |
|---|---|---|---|
| Alabama | 0 | 6,904 | 0 |
| Kentucky | 18,000 MWh | 6,693 | 2.6 |
| Tennessee | 70,000 MWh | 9,283 | 7.5 |
| Louisiana | 39,000 MWh | 4,593 | 8.4 |
| Alaska | 12,000 MWh | 678 | 17.7 |
| Mississippi | 47,000 MWh | 2,453 | 19.1 |
| Connecticut | 100,000 MWh | 4,846 | 20.6 |
| New Hampshire | 46,000 MWh | 2,063 | 22.2 |
| South Carolina | 222,000 MWh | 8,654 | 25.6 |
| Delaware | 21,000 MWh | 796 | 26.3 |
| Ohio | 465,000 MWh | 16,161 | 28.7 |
| New Jersey | 295,000 MWh | 10,024 | 29.4 |
| Pennsylvania | 434,000 MWh | 14,637 | 29.6 |
| Wisconsin | 277,000 MWh | 8,988 | 30.8 |
| Arkansas | 96,000 MWh | 2,994 | 32 |
| Georgia | 504,000 MWh | 12,445 | 40.4 |
| Maryland | 202,000 MWh | 4,697 | 43 |
| Virginia | 393,000 MWh | 8,735 | 45 |
| Florida | 1,185,000 MWh | 26,045 | 45.5 |
| Massachusetts | 337,000 MWh | 6,938 | 49.2 |
ECI Software Solutions’s research reveals that Alabama, despite being an energy-rich state, had limited production of wind or solar, even though it’s one of the largest states for industrial sector energy consumption in the U.S. 70% of Alabama’s renewable energy generation comes from hydropower, instead, due to no utility-scale wind generation, and limited solar.
According to the U.S. Energy Information Administration, Alabama’s solar generation is not able to be logged due to a large relative standard error, though it does note that its total solar commercial power generation is small. This is despite the fact that Alabama’s winters are generally quite mild, as they are throughout many of the southeastern states.
Its lack of commercial wind and solar energy generation could put the state at an economic disadvantage with higher energy costs and reduced clean energy investment opportunities.
Following closely behind is Kentucky, with no commercial wind energy generation, but 18,000 MWh of solar energy generation per month. With 6,600 manufacturing businesses, the state is doing a fraction better with 7.5 MWh of renewable energy generated per month - though not enough to make a sufficient impact.
Similarly, Louisiana and Tennessee don’t have access to commercial wind energy but do have solar.
Experts have predicted the growing adoption of solar energy could impact the market growth of wind power in North America.
Louisiana has 4,500 manufacturing businesses and generates an average of 8.4 MWh of renewable energy per business. Just below the Mississippi River, Louisiana has an abundance of oil refineries - accounting for almost a sixth of the nation’s refining capacity.
Interestingly, Alaska, which is home to the second fewest manufacturing businesses overall, has access to 12,000 MWh of wind energy generation, but limited solar, due to its long winter nights. In fact, the Nature Conservancy found that solar projects accounted forjust 2% of investment in the coldest state in renewable energy in the last decade.
What states have the highest amount of renewable energy for manufacturers?
On the other end of the scale, North Dakota is generating 1,650 MWh of renewable energy per business, putting it ahead of all the states. Interestingly, all of the renewable energy in the northern state is from wind and it’s one of the few states which doesn’t generate solar energy.
Wyoming ranks second with 1,459 MWh of renewable energy energy per business, just shy of double the required amount to power up a factory, followed by Iowa at 1,005 MWh.
Texas is a huge manufacturing hub, with one of the largest pools of factories and facilities in the U.S. - and it also leads the country in energy production, providing almost a quarter of domestically produced energy, nationally.
Texas does lead in wind-powered electricity generation, and ranks second in solar - just behind California. But with over 19,000 businesses to accommodate, manufacturers in the Lone Star State could only just be generating enough power through wind and solar, and there is limited potential for hydroelectric power, according to the Texas government.
States generating renewable energy
| State | Total Renewable Energy Generation by Solar/Wind | Number of Manufacturers | Monthly Renewable Energy Generated per Business |
|---|---|---|---|
| North Dakota | 1,461,000 MWh | 885 | 1,650.8 |
| Wyoming | 975,000 MWh | 668 | 1,459.5 |
| Iowa | 4,261,000 MWh | 4,238 | 1,005.4 |
| South Dakota | 910,000 MWh | 1,063 | 856 |
| New Mexico | ,308,000 MWh | 1,619 | 807 |
| Kansas | 2,401,000 MWh | 3,420 | 702 |
| Oklahoma | 2,965,000 MWh | 4,301 | 689.3 |
| Texas | 10,790,000 MWh | 19,216 | 561.5 |
| Nebraska | 1,105,000 MWh | 2,060 | 536.4 |
| Nevada | 741,000 MWh | 2,152 | 344.3 |
| Colorado | 1,720,000 MWh | 6,167 | 278.9 |
| Montana | 511,000 MWh | 1,988 | 257 |
| Minnesota | 1,615,000 MWh | 8,598 | 187.8 |
| Maine | 332,000 MWh | 1,854 | 179 |
| Hawaii | 203,000 MWh | 1,141 | 177.9 |
| Arizona | 919,000 MWh | 5,433 | 169.1 |
| West Virginia | 209,000 MWh | 1,475 | 141.6 |
| Illinois | 2,518,000 MWh | 19,709 | 127.7 |
| California | 5,552,000 MWh | 45,971 | 120.7 |
| Indiana | 1,073,000 MWh | 9,572 | 112 |
How can manufacturing ERP software help businesses be more sustainable?
Adopting the right ERP software can help manufacturers maximize efficiencies in renewable energy operations. Manufacturing ERP software like ECI’s M1, JobBOSS² and Deacom offers visibility to make well-informed decisions and improve processes.
1. Manage the supply chain
Digital technology like the latest ERP software provides visibility into the supply chain which can help to prevent delays. Manufacturers can identify any bottlenecks and track supplier performance to improve efficiency. ERP software features like production management, material requirements planning, and scheduling can also streamline processes and enable better planning.
2. Quality control
Good quality control measures are essential to manufacturers to prevent recalls, reduce waste, and save costs. ERP software can help with quality control by tracking data and alerting manufacturers to any defects. This way they can ensure goods meet quality standards, and get to the bottom of the defect to improve processes.
3. Cost efficiency
ERP software offers visibility into finances which are essential to tracking and monitoring costs. This can help manufacturers identify any cash flow problems, monitor financial performance, identify areas of improvement and make smart investment decisions. ERP that is cloud-based is scalable according to business needs which helps ensure that investments aren’t wasted on resources that aren't needed.
4. Reduce waste
Manufacturers can reduce waste and energy consumption with ERP software. It enables stronger inventory management which prevents overstocking, and demand forecasting which means manufacturers won’t overproduce. It also enables these businesses to track energy consumption to identify any areas for improvement quickly.
When using a cloud erp, operations are migrated to the cloud, so departments can collaborate on documents digitally. This can make a significant impact on reducing any paperwork or relying on an on-premise data center or infrastructure, which can significantly cut back on energy consumption.
Manual processes take time and could lead to greater human error resulting in waste. ERP enables automation of tasks like data entry and inventory management leading to greater accuracy.
With vast experience in the manufacturing sector, find out how ECI Software Solutions’s ERP software can streamline your business:
Methodology
ECI Software Solutions used data from the Bureau of Labor Statistics to understand the number of business establishments, by state, in the manufacturing industry.
It then took data from ChooseEnergy on wind energy generation, by state, in thousand megawatt-hours), from November 2023, and data from the U.S. Energy Information Administration, to understand the net solar generation for all states, by month, in thousand megawatt-hours, to understand the average amount of renewable energy generated, per manufacturing business.
Data correct as of March 2024.
Global Digital Director
Domenick Naccarato has been a contributing writer for the past 8 years sharing his insight into manufacturing industry best practices, conversations with customers, and information about ERP solutions.
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