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Clean manufacturing benefits Tennessee

There is no disputing that Tennessee's economy has taken a substantial hit in the recent recession. The state's manufacturing sector is composed of more than 20% transportation-related manufacturing, which has been hit especially hard in the throws of this economic downtown. However, one bright spot leading the Volunteer State's manufacturing sector recovery is high-tech manufacturing-related to renewable energy.

In 2009, The Clean Energy Economy study by the Pew Charitable Trust reported Tennessee as one of the three leading states in the United States for clean technology job growth. Tennessee, Oregon, and Colorado were categorized as states with a "large number" of clean energy jobs as well as "fast growing" when looking at the average annual growth rate of these jobs. While the national annual average for clean energy jobs from 1998-2007 was 1.9%, Tennessee's annual average was ahead at 2.1%.

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High-tech, clean energy manufacturing firms are popping up all over Tennessee.

In addition to the green job investments listed in the state's 2009 Annual Workforce Report (p. 63), Missouri-based Confluence Solar announced in late January 2010 selection of Clinton, Tenn., for a new $250 million manufacturing, warehousing, and distribution facility, which could add 250 new jobs to the area. Prior to 2009, Tennessee had already recruited solar firms such as Sharp Solar and Shoals Technologies, large players in the state's clean manufacturing sector.

¹The University of Tennessee highlights the importance of electric car manufacturing to the state’s economic outlook in their 2010 Economic Report to the Governor.

What's attracting these green jobs to Tennessee?
In 2008, Governor Phil Bredesen created a Task Force on Energy Policy, which developed significant strategies to make the state a viable competitor for green collar jobs. According to the Tennessee Economic Partnership, in the last two years, Tennessee attracted more than 1,000 new jobs and more than $2 billion in capital investments. Tennessee also has a welcoming tax environment for new clean-energy manufacturers. In June 2009, Tennessee enacted the Tennessee Clean Energy Future Act of 2009 and expanded its sales and use tax credit for emerging industries to manufacturers of clean energy technologies.

Additionally, Tennessee is using about $31 million in stimulus funds to create the Tennessee Solar Institute at the University of Tennessee at Knoxville and at the Oak Ridge National Laboratory. The center will focus on increasing efficiency in clean energy manufacturing and should benefit solar firms in the area.

So, while employment levels remain low for the Sixth District and Tennessee overall, statewide initiatives and firms are making investments to ensure clean energy will provide a bright spot in the manufacturing and employment outlook for Tennessee.

A special thanks to the Tennessee Department of Economic Development for their contributions to this report.

By Mark Carter, an economic analyst in the Atlanta Fed's research department, and Amy Pitts, senior Regional Economic Information Network analyst at the Atlanta Fed's Nashville Branch

• March 10, 2010 in
  • Employment
  • Energy
  • Green
  • Manufacturing
  • Tennessee
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