U.S. Department of Energy - Energy Efficiency and Renewable Energy

Geothermal Technologies Program

Economic Impacts of Using Geothermal Energy

This 62-MW geothermal power plant in Nevada (Dixie Valley) helps foster economic activity in the state.

The geothermal industry has a positive impact on the economies of many states and local communities, and the U.S. economy as a whole.

Reduces Our Dependence on Imported Energy

One of the most important economic aspects of geothermal energy is that it's homegrown. It's generated using indigenous resources, which reduces our nation's dependence on imported energy, such as oil. In turn, this also reduces trade deficits.

Reducing trade deficits keeps the wealth at home and promotes healthier economies. Nearly half of the U.S. annual trade deficit would be erased if domestic energy resources displaced imported oil. Also, there's a huge international market for geothermal energy-related equipment manufactured domestically. This has the potential to reduce the trade deficit even further and contribute to our domestic economic health.

Fosters Local Economic Actitivity

Many states now seek to expand their use of geothermal energy. They recognize that, in many instances, money spent on energy leaves the communities. The money then goes to outside utilities or energy suppliers. It's no longer available to foster local economic activity. Using their geothermal resources will keep the money local.

For example, Nevada's geothermal power plants produce about 240 megawatts of electricity. This saves energy imports equivalent to about 800,000 tons of coal or 3 million barrels of oil each year. In addition, state governments receive tax revenue. In 1993, Nevada's geothermal power plants paid $800,000 in county taxes and $1.7 million in property taxes. The U.S. Bureau of Land Management collects nearly $20 million each year in rent and royalties from geothermal power plants in Nevada that produce power on federal lands. The Bureau then returns half of these revenues to the state.

For more specific examples of the geothermal industry's positive economic impact on state and local communities, see:

• The Economic Impact of Geothermal Greenhousing from the Southwest Technology Development Institute at New Mexico State University

• The Economic Impact of Calpine's Geothermal Development Projects in Siskiyou County, California (PDF 252 KB) from the Center for Economic Development at California State University, Chico. Download Adobe Reader.