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The U.S. Economy Is Bigger Than We Thought — Thanks in Part to Renewables

The government was undercounting renewable investment by 45%.

Solar and wind power.
Heatmap Illustration/Getty Images

The American economy is even bigger than we thought — and the booming renewables industry is part of the reason why.

On Thursday, the government’s economic-statistics keeper published a big update of the country’s most important economic indicators. For the first time since 2018, the Bureau of Economic Analysis used the newest research tools to comprehensively revise the country’s gross domestic product, inflation, and other national data.

This update covered the period from 2013 to the first quarter of this year.

The big news is that America’s $27 trillion economy is doing better than economists thought. From 2017 to 2022, the economy grew at a 2.2% annual rate — which was 0.1% better than we previously thought. And as the Harvard economist Jason Furman noted, the update doesn’t change one of the most important facts about the past few years: that in GDP terms, the American economy has fully recovered from the COVID-19 recession and is now growing as if the pandemic never happened. In fact, the economy is growing so vigorously that it seems to be returning to its pre-2009 baseline trajectory of growth.

Which — cool. But the update is interesting because it reveals the larger role that renewable energy and other climate-friendly technologies are playing in America. Over the past few years, for instance, economists have realized that the Bureau of Economic Analysis was using a flawed and proprietary data source to estimate investment in the electricity sector. That data showed that the cost of building new electricity capacity in the U.S. was rising — which was weird because, as Neil Mehrota, the assistant vice president of the Minneapolis Fed, observed, the actual cost of wind and solar have plunged over the past decade.

Now, the statistics bureau has updated its data to use actual price information from the wind and solar industry. And it found that over the past decade, America’s real investment in electricity was 45% higher than we previously thought:

To be clear, this doesn’t mean that there are more wind turbines and solar panels out there than we thought. (That kind of data is tracked by a different agency.) It means that the government was mismeasuring the economic impact of those solar panels and wind turbines: Its official economic statistics were undercounting the amount of real growth happening for each dollar of investment, and therefore missing at least part of the ongoing green boom.

This wasn’t the only climate-savvy update to the government’s methods. The newest GDP data also reflects more accurate costs for the National Flood Insurance program. Sadly, the effect of that program on the economy is far more mixed.

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Sparks

Rewiring America Slashes Staff Due to Trump Funding Freeze

The nonprofit laid off 36 employees, or 28% of its headcount.

Surprised outlets.
Heatmap Illustration/Getty Images

The Trump administration’s funding freeze has hit the leading electrification nonprofit Rewiring America, which announced Thursday that it will be cutting its workforce by 28%, or 36 employees. In a letter to the team, the organization’s cofounder and CEO Ari Matusiak placed the blame squarely on the Trump administration’s attempts to claw back billions in funding allocated through the Greenhouse Gas Reduction Fund.

“The volatility we face is not something we created: it is being directed at us,” Matusiak wrote in his public letter to employees. Along with a group of four other housing, climate, and community organizations, collectively known as Power Forward Communities, Rewiring America was the recipient of a $2 billion GGRF grant last April to help decarbonize American homes.

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Sparks

Sunrun Tells Investors That a Recession Could Be Just Fine, Actually

The company managed to put a positive spin on tariffs.

A house with solar panels.
Heatmap Illustration/Sunrun, Getty Images

The residential solar company Sunrun is, like much of the rest of the clean energy business, getting hit by tariffs. The company told investors in its first quarter earnings report Tuesday that about half its supply of solar modules comes from overseas, and thus is subject to import taxes. It’s trying to secure more modules domestically “as availability increases,” Sunrun said, but “costs are higher and availability limited near-term.”

“We do not directly import any solar equipment from China, although producers in China are important for various upstream components used by our suppliers,” Sunrun chief executive Mary Powell said on the call, indicating that having an entirely-China-free supply chain is likely impossible in the renewable energy industry.

Hardware makes up about a third of the company’s costs, according to Powell. “This cost will increase from tariffs,” she said, although some advance purchasing done before the end of last year will help mitigate that. All told, tariffs could lower the company’s cash generation by $100 million to $200 million, chief financial officer Danny Abajian said.

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Sparks

The Power Sector Loves Big Tech’s Billion-Dollar Data Center Plans

Meta and Microsoft both confirmed plans to invest heavily in AI infrastructure.

Meta headquarters.
Heatmap Illustration/Getty Images

Big Tech said this week that it’s going full steam ahead with building out data centers, and the power industry loves it. Since Microsoft and Meta reported their earnings for the beginning of the year on Wednesday, including announcements either reaffirming their guidance on capital expenditures or even increasing it, power sector stocks have jumped.

Shares of Vistra, which has a fleet of power plants including nuclear, natural gas, coal, and renewables, are up almost 7% in early afternoon trading. Constellation, one of the largest nuclear producers in the country, is up 8%. GE Vernova, which makes in-demand gas turbines, is up 4%. Chip designer Nvidia’s shares are up 4%.

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