By Zach Howard

(Reuters) - Massachusetts is the most energy efficient state in the nation, pushing previous leader California into second place, according to a study issued on Thursday.

California had held the top spot for the previous four years, since the start of the annual reports by the nonprofit, nonpartisan American Council for an Energy-Efficient Economy.

Next highest-ranking states in the 2011 Energy Efficiency Scorecard were New York, Oregon, Vermont, Washington, Rhode Island, Minnesota, Connecticut and, for the first time in the top 10, Maryland.

The 10 states at the bottom of the list were North Dakota, Wyoming, Mississippi, Kansas, Oklahoma, South Carolina, West Virginia, Missouri, Alabama and South Dakota.

States have kept their momentum toward better energy efficiency despite obstacles such as a sluggish U.S. economy, tight state budgets, and Congress's inability to adopt a comprehensive energy strategy, the group said in its fifth annual report.

Massachusetts Governor Deval Patrick lauded his state's top ranking. "We set aggressive goals and laid the foundation for greater energy efficiency," he said.

Total budgets for electricity efficiency programs jumped to $4.5 billion in 2010, from $3.4 billion in 2009, the report said. Adding in natural gas program budgets of around $1 billion, total energy efficiency budgets reached $5.5 billion last year, with growth continuing in the next decade.

Some 29 states have adopted or made major progress toward adopting the latest energy-saving building codes for homes and commercial properties -- up from 20 states in 2010 and 10 the previous year, it said.

The organization said about 40 percent of a state's energy efficiency score is based on efforts to use utilities better. These include programs run through utilities that are funded by rate-payers to fund retrofitting or rebates for more efficient lighting. Some states which scored low do not have such utility programs.

Other measures were whether states have incentives for high-efficiency vehicles, public transportation and land-use planning, including denser communities.

(Editing by Barbara Goldberg and Jerry Norton)