All sectors across all economies are trying to add up their potential job losses and projects in jeopardy, then telling their governments to prioritise them for support. Mike Jacobs at the Union of Concerned Scientists looks at renewables in the U.S. He quotes news reports that over 100,000 workers in this fast-growing industry filed for unemployment in March 2020. On top of that, the already planned expiry and phase-down of certain targeted renewables tax credits threaten hundreds of thousands of jobs and tens of billions of dollars of investments for solar and wind. Knock-on casualties will include U.S. ambitions to keep building a manufacturing base for wind turbines and batteries, while investment uncertainty threatens across the board, including transmission projects. Jacobs fleshes out the argument for support, and points to existing mechanisms that can be used – and have been used successfully in the past – to get back on track. Many important sectors are struggling. As they all queue up for support the renewables sector will base their case for priority on the universal benefits of 21st Century energy that is clean, getting cheaper, creating new jobs and delivering home-grown manufacturing, with all the spill-over effects to the wider economy.
The COVID-19 outbreak has created a public health crisis unseen in the age of modern medicine, and an economic crisis on the scale of the Great Depression. America’s ability to respond and recover with investments that improve public health and job security will shape this country for years. These investments should recognise the breadth and diversity of people and places in this country.
One industry that can help now save skilled jobs in rural areas and improve everyone’s health over the years while meeting society’s needs is clean, renewable energy. Often, new renewable energy facilities are the largest new construction or manufacturing projects in the counties that host them.
Renewable energy disruption, job losses
The renewable energy industry and its workers, all across the US are being harmed by the coronavirus. Demand and energy prices are volatile; and recent news reports that over 100,000 workers in the fast-growing renewables industry filed for unemployment in March 2020. Futhermore, health and family needs are causing employee absences; public health measures to mitigate the spread of the virus are causing disruptions to supply chain and uncertainties are leading to financing challenges and project cancellations.
Concerns about coronavirus are placing many projects (and jobs) on hold. The solar industry is projecting job losses as high as 120,000 (almost half their workforce) with greatest impacts in Florida, Georgia, Nevada, Texas and Utah. The wind industry estimates that 35,000 jobs and $43 billion in investments are at risk, many in Iowa and Missouri.
Still, these job losses are all across America. To get a sense of where these workers feeling the strain, see map below of the wind, energy storage and solar power investment planned in the Heartland. This is just a map from the Midcontinent grid operator. More construction is planned in the areas adjacent to meet the USA’s electricity needs.
Congress should plan funding for our rebuilding after this public health and economic crisis in a way that gives the power sector support and strengthens U.S. employment and development with well-understood policies that help get people back to work.
In addition, UCS (Union of Concerned Scientists) has worked with peers to develop principles for the equitable deployment of energy storage and diversity in supply chain to demonstrate how to make this energy investment more socially just.
Tax credits to build clean energy
The expiring Production Tax Credit (PTC) that wind developers rely on, and the phase-down of the Investment Tax Credit (ITC) for solar and offshore wind, threaten hundreds of thousands of jobs and tens of billions of dollars of investments. These tax credits have been the most effective federal policy tool for deploying clean energy. Since the last ITC/PTC extensions in late 2015, the wind industry has created over 26,000 new jobs and solar installations have doubled creating over 40,000 new jobs.
- Congress must give solar and wind workers certainty that they can continue building the nation’s clean energy infrastructure after this crisis. Lawmakers should extend the PTC and the ITC for five years and expand eligibility to stand-alone energy storage technologies as well as high voltage transmission, kick-starting hundreds of shovel-ready projects, securing and creating thousands of jobs in the construction, manufacturing, wholesale/distribution, and utility sectors.
- Congress should recognise the renewable energy industry has been fast-growing but needs support. Lawmakers could provide direct payments and refundable tax credits (or 1603 Grants in Lieu of Tax Credits) for renewable energy to stabilise clean energy financing. These are available to many more organisations and address the weakening impact of federal tax incentives in a time of extraordinary public health measures and reduced economic activity. Providing direct payments, refundable tax credits, and/or grants to municipal utilities, electric co-ops and other community and non-taxed entities, in lieu of tax credits, will provide more types of organisations access to incentives and greater stability to clean energy.
Tax credits to manufacture clean energy
Renewable energy involves U.S. manufacturing and its success is dependent on this industry’s health. But lost US jobs at US factories are already adding up. This map shows US wind equipment manufacturers locations.
U.S. manufacturing matters
The U.S. manufacturing sector will need the support of the federal government to help people be employed and supply necessary components for building the nation’s infrastructure. The wind industry, for example, relies on domestic manufacturing for the vast majority of its nacelles, towers, fibre-technology blades and massive cast hubs.
Maintaining and growing the domestic manufacturing supply chain for advanced battery technologies is critically important to both the electric vehicle and renewable energy industries. In 2009, through ARRA, the American Recovery and Reinvestment Act, Congress provided $2.3 billion for a 30 percent tax credit that supported 183 domestic clean energy manufacturing facilities and thousands of jobs.
Congress can help support America’s manufacturing core in this crisis by extending and funding the Advanced Manufacturing Facility Investment Tax Credit under Section 48C of the Internal Revenue Code. Congress should also clarify that advanced battery manufacturing facilities qualify and are eligible.
Loan guarantees for Clean Energy projects
As financial markets struggle to cope with the COVID-19 crisis, financing for clean energy, energy storage and transmission system projects will become scarcer and more risk averse.
As of March 20, 2020, S&P Financial list more than 1,700 wind and solar projects, totalling more than 207,000 megawatts of capacity either in advanced stages of development or under construction across the U.S. with projects in all fifty states. In addition, there are more than 180 transmission projects, and more than 80,000 megawatts of new power plants paired with battery storage systems, under development across the U.S. Each of these projects now faces a potentially uncertain financing future due to the COVID-19 crisis and its impact on financing and equity markets.
To ensure these investments in our clean energy future continue to move forward and keep people working while maintaining our clean energy momentum, Congress should establish and fund a national clean energy loan guarantee program (or modify DOE’s Title XVII Energy Innovation Loan Guarantee Program) to provide financial backing to “shovel-ready” clean energy, energy storage and transmission projects facing financial uncertainty due to the impacts of the COVID-19 crisis.
People are feeling the pressures of the pandemic, and the fast-growing renewable energy sector is, too. When the time comes—and it will—Congress should keep in mind the jobs at stake or lost in this sector and institute policies to support the nation’s clean energy workforce.
Mike Jacobs is a senior energy analyst at the Union of Concerned Scientists
This article is published with permission