Retailers Are The Surprising Leader Among U.S. Industries For Green Investments

The retail sector is the surprising leader in U.S. green investments. This is according to the Clean Investment Monitor by Rhodium Group and the Center for Energy and Environmental Policy Research at the Massachusetts Institute of Technology. The publication has been collecting data on investments by the retail, energy and industry as well as the manufacturing sectors, looking at production and purchases of EVs, the expansion of green energy capacity and carbon management as well as investments in battery technology, energy storage and heat pumps, among others.

In Q2 of 2024, the retail sector in the U.S. invested almost $33.6 billion in green technology or clean energy - ahead of the energy and industry sector at $23.5 billion. Manufacturing came third at $19.2 billion. Retail's spending focuses on EVs and other zero emission vehicles, giving the sector an accessible and easy-to-implement way to invest in clean energy. In the other sectors, more expensive and tailor-made solutions might at times make investments more difficult or take more time, potentially explaining some of the lag. However, manufacturing investments have been rising more steeply recently. The change is tied to big investments in battery manufacturing in the United States that started to take off towards the end of 2022.

As a result, manufacturing investments more than quadrupled in the past two years compared to the two years before that. Retail as well as energy and industry investments have been rising slower but more steadily over the years. This is with the exception of the past two quarters for the latter sector, when investment volumes sank. The change was due to fewer investments in wind and solar. According to the source, big declines in the wind energy sector were tied to higher interest rates, supply chain problems as well as siting and permitting issues. More money was invested in the smaller subsectors of energy storage, clean hydrogen and carbon management, however.

The state leaders in the retail space were Oklahoma, California and Maine, investing between 1.06 percent and 0.74 percent of their GDPs in green energy and related fields. In absolute terms, California's retail investment in EVs stands out and at $25.6 billion in the four quarters between Q3 2023 and Q2 2024 made up 20 percent of the nation's retail green investments in that time period. Of course, vouchers and incentives available for EV purchases in California propped up this number.