Top Reasons Why Some States Excel in Energy Development
- Craig Kaiser
- Jan 1
- 4 min read
Updated: Apr 14

In today’s world, energy development is more crucial than ever. Not only does it power our homes and businesses, but it also plays a significant role in economic growth and stability. For property owners and real estate professionals, understanding why some states excel in energy development can provide valuable insights into future investments and property values. This resource will explore the top reasons why some states lead in energy development and how this impacts real estate.
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Key Influences on Energy Development
Reasons that some states excel in renewable energy development compared to others include geography, economic/ regulatory support, and natural resource availability.
Geography
Geography plays a significant role in a state's energy development capabilities. States with abundant natural resources, such as sunlight, wind, and water, have a natural advantage. For instance, Arizona enjoys more than 300 sunny days a year, making it ideal for solar energy projects. Similarly, Washington State benefits from its abundant hydroelectric resources, providing a stable and renewable energy source. Similarly, coastal states like California and Maine leverage their access to offshore wind resources, while states with significant river systems, such as Washington, lead in hydroelectric power generation.
Economic & Regulatory Support/ Incentives
Economic and regulatory support is another critical factor. States that streamline permitting processes and offer financial incentives attract more energy development projects.
State GDP and Funding: States with higher GDPs can allocate more resources to developing energy infrastructure. For example, California, with one of the largest state economies, has invested heavily in renewable energy projects like battery storage and grid modernization.
Energy Investment Incentives: Financial incentives such as production tax credits (PTCs) and investment tax credits (ITCs) play a significant role. States like Colorado and New York offer robust financial incentives to attract renewable energy companies.
Cost of Development: The cost of land, labor, and materials can vary greatly. For instance, land acquisition for large-scale solar farms is often cheaper in rural states like New Mexico compared to urbanized states.
Access to Capital: States with a strong presence of financial institutions or policies encouraging public-private partnerships tend to lead in energy development. Texas is an example where the private sector significantly funds energy projects, reducing the reliance on state budgets.
Additionally, states with robust energy policies often experience higher economic growth. A study by the National Renewable Energy Laboratory (NREL) found that states like California and New York, which have stringent renewable energy mandates, have seen significant economic benefits, including job creation and increased property values. In contrast, states with weaker energy policies lag in these areas.
Natural Resource Availability
The availability of natural resources like sunlight and wind also affects clean energy development in specific states. States like Kansas and Oklahoma thrive in wind energy production due to consistent high wind speeds and vast open spaces. Similarly, Arizona and Nevada excel in solar energy thanks to high solar irradiance and minimal cloud cover.
Understanding State-Level Renewable Energy Policies
Government and state incentives are pivotal in driving energy development. States offering substantial incentives for renewable energy projects attract more investments. These incentives can include tax credits, grants, and rebates, which reduce the cost of setting up renewable energy installations such as solar panels and wind turbines.
For example, California offers an array of incentives that have positioned it as a leader in renewable energy. In fact, California is home to the largest solar farm in the United States. The state’s aggressive Renewable Portfolio Standard (RPS) requires utilities to source 60% of their electricity from renewable sources by 2030. This policy has led to significant investments in utility-scale solar and wind projects, making California a benchmark for others.
Leading States in Energy Development
California, Texas, and New York lead the United States in clean energy development. For example, Texas leads the country in wind energy production. The state's vast open spaces and strong wind resources have made it the largest producer of wind energy in the United States. Texas’s Competitive Renewable Energy Zones (CREZ) program has significantly improved the infrastructure for transmitting wind-generated electricity.
New York offers another compelling case study in urban energy development. The state’s Reforming the Energy Vision (REV) initiative aims to create a cleaner, more resilient, and affordable energy system. By encouraging distributed energy resources like small-scale solar and battery storage, New York is setting a new standard for other urban centers.
Practical Tips for Property Owners and Real Estate Professionals
Energy policies can significantly impact property values. Properties in states with strong renewable energy policies often enjoy higher resale values. For example, homes with solar installations in California have been shown to sell at a premium compared to those without. Real estate professionals should stay informed about local and state energy policies to better advise clients on potential property investments.
Highlighting renewable energy features in property listings can attract environmentally-conscious buyers. Features like solar panels, energy-efficient appliances, and smart home systems not only reduce energy bills but also appeal to a growing demographic of eco-friendly consumers.
Property owners and real estate professionals should stay informed about state and local energy initiatives. Subscribing to newsletters from energy commissions, attending local government meetings, and joining relevant industry associations can provide valuable insights into upcoming policies and incentives.
Challenges and Opportunities in Energy Development
While some states have clear advantages, the energy transition is not without its challenges. Environmental concerns and the push for sustainability are reshaping the landscape, creating both hurdles and openings for those involved in energy and real estate.
Environmental Concerns and Sustainability Efforts: With the global focus on climate change, states are under increasing pressure to move towards sustainable energy models. This shift presents challenges for traditional energy sectors but also opens up new opportunities for those at the forefront of the clean energy revolution.
Economic Growth and Job Creation: Energy projects have historically been significant drivers of economic growth and job creation. With the right mix of policies, states can continue to harness the potential of their energy resources to provide long-term benefits to their residents and real estate markets.
Understanding Energy Development
Understanding the complexity of energy development factors and their interactions with real estate is essential for making well-informed decisions. By considering state energy policies along with traditional real estate metrics, you can position yourself to take advantage of emerging opportunities and trends.