Now, as Healey campaigns for a second term amid staggering housing costs that are pushing many to leave the state, Massachusetts’ need for a new economic powerhouse has become even more urgent. Yet the state has fallen behind on its $1 billion funding target as the industry faces attacks from the federal government. Other states — California, New York, Texas — are competing fiercely for top companies and talent, and some of our proudest poster children for the sector are taking their major manufacturing efforts elsewhere, bringing hundreds of green jobs with them.
Meanwhile, the Trump administration has yanked billions in funding from green energy projects and thrust such industries as offshore wind into deeper waters of uncertainty. And while Massachusetts has poured money into tax breaks for promising companies here, it has also slashed funding for its own Clean Energy Center, a quasi-public agency known as MassCEC that is meant to support and champion the industry.
Still, optimists say that climate tech — talked about for years as the state’s next big solution — has the potential to fuel the Massachusetts economy, if we do it right.
“All the signs are there, similar to what they were in life sciences, for us to really be the leader here,” said Yvonne Hao, a former state economic development secretary who worked under Healey.
But, she cautioned, “it is a jump ball, and many other places — including California, including China — many other places are vying for the same thing,” Hao said. “So we’ve got to really keep the pressure on.”
Nearly two decades ago, then-Governor Deval Patrick made a big bet on an industry he thought could carry Massachusetts into a new age.
Over 10 years, even as the nation weathered the Great Recession, Massachusetts poured $1 billion into life sciences, including money for research grants, workforce training, and tax incentives. Today, Massachusetts is an undisputed leader in the sector.
Healey has repeatedly pointed to Patrick’s life sciences initiative as a model for climate tech. And the comparison makes sense, Patrick said in an interview with the Globe.
Like life sciences, climate tech plays to Massachusetts’ natural advantages in research and innovation, he said — and the state needs its next “next thing.”
“We need a thriving economy,” Patrick said. “We need a place where folks want to be, where they can make a way for themselves and their families.”
Climate tech is already a big part of that economy. After pushing through headwinds in the 2010s in solar energy and electric-vehicle batteries, Massachusetts now has a sprawling clean-tech sector. Companies here are working on everything from low-carbon cement for manufacturing, to grid-scale batteries bigger than your house, to a fusion nuclear reactor that would, essentially, function as a small, man-made star.
Massachusetts has nearly 11,000 businesses and 163,000 jobs in climate tech, according to the MassCEC — more employees than in biotech or higher education. Of the world’s top 20 companies in the energy transition, 16 have a presence in Massachusetts, bested only by Texas, which has 19, according to a recent report from the Alliance for Climate Transition. Massachusetts is home to the headquarters of GE Vernova, one of the world’s biggest energy companies.
Healey, who declined an interview for this story, has pitched a $1 billion investment into the sector over 10 years. Alongside additional funding for MassCEC — now more limited — the centerpiece of her plan is the 2024 Mass Leads Act, which promises $300 million for tax incentives, $200 million in bond authorizations for offshore wind, and $200 million for grants to commercialize climate tech products.
Massachusetts also recently finalized new siting and permitting regulations for clean energy infrastructure, such as solar farms, earning praise from environmental leaders for easing the transition to greener sources of power.
“We very much compete for the number one spot” in climate tech, said Eric Paley, Massachusetts’ economic development secretary.
“All markets go through boom and bust cycles, and climate tech is at a tougher moment right now because of federal withdrawal of support,” Paley said. He has no doubt it’s “going to be a huge market for us.”
Yet it may not be enough to beat the competition, as other states make major investments and court our strongest companies.
New York, for example, has a multibillion-dollar Clean Energy Fund available for climate tech companies, and New York City is building a $100 million climate innovation hub. As of 2023, according to a MassCEC report, California led the nation with 25 percent of climate tech investment, while New York followed with 14 percent and Massachusetts had 11 percent.
“I don’t think we have cemented any kind of permanent leadership role yet,” said Elizabeth Turnbull Henry, president of the Environmental League of Massachusetts.
One cause for concern: a workforce shortage. Nearly 30,000 new clean energy workers are needed by 2030, according to MassCEC. Many of those “gaps in workforce” are hard-to-hire technician roles such as welders, said Kristen Cullen, vice president of global policy and public affairs for the nuclear energy company Commonwealth Fusion Systems.
“It’s not just physicists that we’re hiring,” Cullen said. For Massachusetts to become the nation’s leader, she said, “Mass Leads is a good start, but it’s going to take more investment from the state.”
Raising money is another major challenge, especially for early-stage companies, said Georgina Campbell Flatter, head of the Somerville incubator Greentown Labs, home to more than 175 startups.
“The bigger risk is less about them leaving Massachusetts, and more about, they never leave the lab,” Flatter said.
To graduate from startup status, many companies desperately need money from outside the venture capital world, like grants and tax breaks. “That early-stage funding has slowed,” she said. Massachusetts has been an excellent partner, but “there’s more we can do there,” she said. “We just need to decide these are technologies that really matter to our future, our economy, our planet, and we just need to mobilize more [money] for them.”
Of course, funding is all the more challenging under a federal administration that has been hostile to much of the green economy. Offshore wind, once seen as a promising new industry for the state, has suffered devastating setbacks, both from supply chain challenges and political attacks from Washington.
Shortly after Trump was reelected, the Italian company Prysmian Group abandoned plans to build a Massachusetts factory that would have supplied undersea cables to offshore wind farms. That one decision cost more than 100 skilled manufacturing jobs, said Frank Callahan, president of the Massachusetts Building Trades Unions.
“To have the rug pulled out from under them, it’s pretty scary,” Callahan said. “We invested a lot of our own money with the unions in training our members [for offshore work] … but right now, unfortunately, there’s no projects to send those members to.”
Local green-tech companies have also taken major hits. Sublime Systems, a Somerville-based clean cement company, ultimately halted plans to build a $150 million factory in Holyoke after the Trump administration yanked an $87 million grant.
The Sublime outcome was “disappointing beyond words,” said Ben Downing, CEO of the MassCEC. The company and state officials tried to salvage the manufacturing effort but couldn’t, he said. “There are times when only the scale of the federal government can step in.”
Funding cuts have hit hard at the state level, too. MassCEC, which supports the sector, recently laid off 11 people, and its funding allocation in the state budget has steadily declined from $30 million just a few years ago to $8 million in the current fiscal year.
It’s not how you might expect Massachusetts policymakers to fund a top economic priority. But Downing said state dollars are still pouring into climate tech — it’s just that even more is needed.
“We’re dealing with less support from the federal level and outright hostility in several key sectors,” Downing said. “Everyone who runs a clean energy and climate organization would tell you they could do more with more.”
Now, Massachusetts has to answer an age-old question: How can we move from inventing things to making them? For climate tech to lift the whole state’s economy, the sector has to benefit not only the scientists and executives dreaming up new solutions but also the blue-collar workers who turn those ideas into products.
“If we’re going to create it here and invent it here, then we also need to manufacture it here, build it here, and create careers,” said Kristen Gowin, executive manager for Boston’s chapter of the National Electrical Contractors Association.
Healey has emphasized that the sector should lift all boats and that she’s investing in workforce training for clean-tech jobs. But state officials appear resigned to the idea that they can’t compete for every manufacturing role that the sector will produce.
Consider Commonwealth Fusion Systems, which Massachusetts recently awarded a $7.5 million tax break. Spun out of MIT, and now based at a 60-acre campus in Devens, the company is trying to harness nuclear fusion, rather than the well established fission reaction, to build its first power plant. By the 2030s, company leaders say, it could generate enough energy to power 150,000 homes.
But the first state to host its new power plant will be Virginia, not Massachusetts. Cullen said the company weighed sites everywhere, including here, but the Virginia location — abutting a retired coal plant and a gas plant outside Richmond — proved to be the best fit due to consumer demand and proximity to the country’s largest grid operator.
“We have to understand where our customers want us to be,” Cullen said.
You could tell a similar story about Form Energy, which recently received a $5.7 million tax credit from Massachusetts. The maker of grid-scale batteries was born in Cambridge coffee shops and MIT, nurtured at Greentown Labs, and is still headquartered in Somerville. But its largest workforce site is in Weirton, W.Va., where it is expected to grow its factory to more than 750 employees.
There aren’t many places where you can build batteries “the size of a football stadium,” cofounder and president Ted Wiley said on a panel earlier this year. “We need 250,000 tons of iron to be coming in and out of our factory every year. That means we need a river. We need a rail spur. We need highway access. … We’re basically looking for a steel mill or a coal mine.”
“There aren’t a lot of those left in Massachusetts, unfortunately, or we probably would have put the manufacturing here,” he said.
It’s nothing new for companies to locate in less dense parts of the country where energy and water are cheaper and tax breaks may prove to be more plentiful. When the calculation is about “brute force — as much labor as you can get, as low energy [costs] as you can get — we’re not going to succeed as well as some other places on that,” acknowledged Paley, Healey’s economic secretary. “In Massachusetts, we win in manufacturing when the primary driver is around talent.”
For that reason, Paley and others remain optimistic about the sector — that as federal attitudes change, and state investments pay dividends, Massachusetts can create both knowledge economy jobs and skilled manufacturing roles.
“We want to make sure that we learn from life sciences and we help everybody benefit from this sector,” said Hao, the former economic secretary. “How do we train the next generation of climate-tech workers?”
It’s going to take a while to know how well Massachusetts is doing, Hao acknowledged.
But if it does?
We can help make the Earth “a sustainable planet for us all to live on,” Hao said, but also “create a ton of companies, a ton of jobs, and a ton of economic impact and value.”
Emma Platoff can be reached at emma.platoff@globe.com. Follow her @emmaplatoff.
