Clean and Cheap: Industrial Energy Data for All 50 US States

In the manufacturing industry, energy costs are a significant part of the overall expenses, and the source of energy can greatly impact a company’s carbon footprint. For manufacturers, minimizing energy costs and emissions is crucial to staying competitive and meeting regulatory and consumer demands for sustainability.

Why clean and cheap energy matters

Manufacturing facilities use energy for a wide range of processes, including running machinery, powering automation systems, as well as heating, cooling and lighting. Advanced manufacturing, which often relies on automation technologies to drive efficiency and quality, is particularly energy intensive.

Lowering energy costs directly reduces operating expenses, while cleaner energy sources help companies adhere to environmental, social and governance (ESG) standards, potentially avoiding costly carbon pricing and green regulations.

Clean energy refers to energy generated from renewable, low-emissions sources such as hydroelectric, wind, solar and nuclear power. These sources produce little to no greenhouse gas emissions during their operation, making them environmentally friendly alternatives to fossil fuels like coal, oil and natural gas.

Volkswagen’s decision: A case study

When Volkswagen chose Ontario for its first North American battery manufacturing facility, three of the reasons it gave were Canada’s high ESG standards, a widely decarbonized power mix and ideal economic conditions.

In this case, ideal economic conditions meant many things – including government support – but among those ideal conditions were low energy costs.

The ESG standards and a decarbonized power mix factors go hand in hand. It was almost certainly part of the calculation for VW: if you’re building electric vehicles for customers that want to be environmentally friendly it’s hard to walk the talk if your energy is all coming from coal-fired power plants.

This isn’t guesswork, though. VW has confirmed that the cleanliness of Ontario’s energy was a deciding factor in its decision to invest $7B here.

So, the holy grail for energy-conscious manufacturers is a jurisdiction with low energy costs and lots of clean energy. The problem is that finding both is harder than you might imagine.

In fact, finding any comparative information at all can be tricky. That’s why we did the work for you. In the table below, you’ll find comparative data for electricity pricing and clean energy in all 50 US states (as well as our community – Waterloo, Canada).

Where can you find the least expensive electricity?

Scanning the list, it’s immediately apparent that most US states are within a few US cents per kilowatt hour (kWh). More than half of the states offer industrial energy at less than eight US cents per kilowatt hour. It’s also apparent that price appears to have only a minimal correlation with how clean the energy is.

For example, the least expensive industrial electricity in the United States can be found in Louisiana, where less than 17% of the energy is produced through clean energy generation.

In second place, you find New Mexico, which has a commendable 50% of its energy generation from clean sources, particularly wind. Within one US cent of the Louisiana rate, you have Washington, which is up at 78% clean energy thanks to substantial hydroelectric.

In other words, it’s possible to be inexpensive and green.

Interestingly, some of the more expensive energy is found in states with some of the least clean energy production. At 15.59 US cents per kilowatt hour, Connecticut is nearly triple the cost of Washington, but just 42% of its energy is clean. Rhode Island is even worse, at 19 US cents per kilowatt hour, its grid is just 23% clean.

In Waterloo, Canada, where nearly 90% of the energy is clean, we charge just 6.22 US cents per kilowatt hour. If Ontario, our home province, was a US state it would be the third cheapest for industrial users.

Here are the US states with the least expensive industrial energy:

• Louisiana – 5.90 US cents/kWh
• New Mexico – 5.91 US cents/kWh
• Oklahoma – 6.34 US cents/kWh
• Tennessee – 6.37 US cents/kWh
• Texas – 6.63 US cents/kWh

Where can you find the cleanest electricity?

When ranking the list for clean energy production, it becomes clear that there are many paths to a clean grid.

For example, the highest percentage of clean energy in the United States is found in Vermont, with an incredible 121% of its energy coming from low-emissions sources – especially hydroelectric and solar.

In California, where 87% of the energy is clean, about half of the energy comes from solar. In Washington, where 78.85% of the energy is clean, about three quarters comes from nuclear, hydroelectric and wind.

In Waterloo, where energy is just about 90% clean, the main sources are hydroelectric and nuclear. If Ontario, our home province, was a US state, it would be the second cleanest.

Here are the US states with the cleanest energy grids:

• Vermont – 121% clean energy
• California – 87.5% clean energy
• Maine – 80% clean energy
• Washington – 79% clean energy
• South Dakota – 77% clean energy

Industrial Energy Costs for All 50 US States (and Waterloo)

Waterloo for the win

We’ve focused primarily on comparing US states, but the real story is that manufacturers in Waterloo are tapping into one of the cleanest and cheapest energy grids in North America.

Add our strategic location in the middle of Canada’s largest manufacturing corridor – and Canada’s largest automotive corridor – with easy access to some of North America’s largest markets, and it’s no wonder that major manufacturers like Ford, Toyota, Honda, Magna, AstraZeneca and Dana Corporation are making huge investments in our area.

Oh, and don’t forget our low corporate income and payroll taxes, which compare favourably to just about every US state, too.