TODAY’S STUDY: CLEANTECH JOBS 2010

Clean Tech Job Trends 2010
Ron Pernick and Clint Wilder with Trevor Winnie, October 2010 (Clean Edge/SJF Institute)

What a difference a day makes, especially an election day. When the study below was released in October, a $100 billion, 10-year investment in New Energy that would produce 2 million new high quality, good paying jobs by 2020 still seemed something within reach. Now, insiders in Washington, D.C., are specualting as to whether presumptive Speaker of the House John Boehner (R-Ohio) and his Republican cohorts will remember, in their rush to restore the dominance of their corpoate campaign donors, the accomplishmnets to date of the New Energy industries .

Pessimists foresee little hope for the New Energies while optimists insist the logic of New Energy is undeniable. The evidence offered here lends weight to the optimists' case.

Realists follow the money. As a veteran wind industry insider and lifeliong Republican pointed out to NewEnergyNews in an off-the-record interview last week, there is a lot of big corporate equity in the New and Old energies. What those folks want is federal investment in all of it.

So look for a deal funding the New Energies along with deepwatwer oil exploration, high-tech natural gas drilling, new nuclear and "clean" coal. And watch for a shift FROM talk about a Renewable Electricity Standard (RES) requiring utilities to obtain their power from New Energy sources TO talk about a Clean Energy Standard (CES) requiring utilities' investments to include both New Energy sources and low emissions technologies like next-generation nuclear, "clean" coal and natural gas hydrofracturing.

The biggest unanswered question: What will moderate Democrats in the Senate need from conservative Republicans to join a 60-vote, filibuster-breaking coalition to delay or cancel EPA's legal power to act against greenhouse gas emissions? Blocking the EPA would truly be a deal with the devil but that is what many Republicans see the mood of the country to be right now. Can they entice Democratic Senators tenuously holding up-for-grabs-in-2012 seats to see it their way?

Introduction:

By almost all measures, the global economy continues to be in historically dire shape – and some still fear a double-dip recession. This economic malaise doesn’t bode well for those seeking decent, high-paying jobs. Overall unemployment rates in the United States and Europe hover around 10 percent, with rates much higher if you count those who have stopped looking for jobs altogether.

Globally, the youth unemployment rate (defined as active youth between the ages of 15 and 24) is at a record high, according to the United Nations International Labour Organization, climbing from 11.9 percent in 2007 to 13 percent in 2009. At the same time, many regional and national governments continue to experience massive budget shortfalls and some are taking drastic actions with regards to public staffing. California Governor Arnold Schwarzenegger, for example, facing an unprecedented $19 billion budget shortfall in his state, started furloughing public workers earlier this year, forcing mandatory, unpaid days off for many public employees in a battle that has landed the state in court.

These are just some of the devastating realities coming out of The Great Recession.

Against this backdrop, clean energy continues to fuel the plans of many cities, states, nations, investors, and companies as they look for the next wave of innovation and growth. And on many counts, the clean-energy sector is delivering new job and economic opportunities, as it moves from a once-marginalized niche to an increasingly cost- competitive, mainstream offering. There are many challenges facing the sector, but clean energy and more broadly, clean tech, offer some of the largest growth opportunities on the global economic horizon. As we highlight in this report, green jobs can pay well and span the spectrum from “green-collar” trade jobs to Ph.D.-level engineers.

click to enlarge

Green-job naysayers often question the validity of green jobs, stating that there’s no clear definition for what constitutes a green job and that any new jobs in clean tech simply displace jobs from other sectors, creating no new net jobs. But clean-tech jobs are not amorphous as these critics claim, and instead represent some of the most dynamic sectors in the technology landscape, including electric vehicles (cars, trucks, and rail), energy storage, green-building materials, advanced lighting, solar power, wind energy, and the smart grid. A Political Economy Research Institute report released in late 2008, Green Recovery, estimated that $100 billion spent on clean energy over a 10-year period could create two million new jobs, compared to just 500,000 jobs if the money were invested in oil and gas-related industries. The Center for American Progress, in a related Green Jobs 101 fact sheet, states that “renewable energy and efficiency improvements create twice as many jobs per unit of energy and per dollar invested than traditional fossil fuel-based generating technologies.” In other words, money invested in clean energy, based on these estimates, creates two to four jobs for every one job created if the money were spent on fossil fuel industries.

Industrial leaders in the U.S., China, South Korea, Germany, Japan, and other nations, responding to this opportunity, are now vying for clean-tech leadership and the jobs that come with it. According to Clean Edge research, the solar PV industry alone now represents approximately 300,000 direct and indirect jobs globally, while the wind-power sector includes more than 500,000 direct and indirect jobs worldwide. The Renewables 2010 Global Status Report, the highly-regarded annual publication from global research group REN21, shows that total jobs in renewable energy industries exceeded three million globally in 2009. According to the report, Brazil and China account for the largest share of renewables employment globally, representing more than 700,000 and 250,000 respectively in the bioethanol and solar hot water industries alone. According to the report’s findings, many of these jobs can’t be exported, as they are based heavily on local jobs in installation, operations, and maintenance.

As clean energy becomes increasingly embedded in nations’ economies, how will it impact job growth? According to an August 2010 article in the New York Times, Portugal is on track to get 45 percent of its grid electricity from renewables this year. Clean-energy research firm IHS Emerging Energy Research projects that other countries will soon join this club, with Ireland, Denmark, and Britain on pace to getting 40 percent or more of their electricity from renewable sources by 2025.

While this alone doesn’t guarantee massive job creation (Portugal’s unemployment rate stands at around 11 percent), it does represent a significant opportunity for business creation and long-term competitiveness. Portugal, for example, is now home to a number of large global renewable-energy companies as a result of its clean-energy push, including publicly traded EDP Renováveis, one of the world’s largest producers of wind-generated electricity – and the nation is weaning itself off of expensive and volatile foreign sources of energy.

click to enlarge

In the following pages of this year’s Clean-Tech Job Trends report, we highlight:

- where clean-tech jobs are being created, including the Top 15 U.S. metro areas for clean-tech job activity;

- how much clean-tech jobs pay, including our annual survey of compensation levels for dozens of job titles (completed in collaboration with compensation specialist PayScale);

- global manufacturing hotspots, and how nations are vying for clean-tech leadership;

- five major trends that we see reshaping the clean-tech jobs landscape;

- how China, the U.S., and other nations can compete effectively for clean-tech job creation.

Finally, at the end of the report, we provide an online resource guide for clean-tech job seekers and employers alike – with references to clean-tech books, reports, web sites, jobs boards, job fairs, networking organizations, educational programs from trade schools to MBAs, and more. We hope that our second annual Clean-Tech Job Trends report is a useful guide for investors, economic developers, policy makers, employers, and job seekers as the transition to a clean-tech economy moves forward.

click to enlarge

Five Job Trends To Watch

1. Clean-Tech Jobs Sprout South Of the Border

As discussed in the previous section, cost-cutting is king in the world of clean-tech manufacturing.

For developed countries, this often means moving jobs to emerging markets with lower labor costs. While China’s early lead as a low-cost manufacturer has been well documented, a similar, quieter story is being written in Mexico.

With a combination of cheap labor and geographic proximity, the United States’ third-largest trading partner is attracting attention from those looking for low-cost access to the North American clean-tech market. So far, the early leader in Mexico’s clean-tech supply chain development is end-assembly activities for the solar photovoltaic (PV) industry.

In late 2009, Japan-based Sanyo completed expansion of its Monterrey, Mexico module assembly plant, more than doubling output capacity to 50 MW annually. Two months later, BP Solar and American electronics manufacturer Jabil Circuit announced an agreement to assemble 45 MW worth of solar modules at Jabil’s plant in Chihuahua. And in August 2010, U.S. thin-film solar manufacturer Energy Conversion Devices revealed plans to shift final assembly operations to its Tijuana facility, essentially outsourcing 140 jobs from the company’s Auburn Hills, Michigan campus.

Solar isn’t the only industry setting up shop in Mexico. German equipment manufacturer Liebherr recently constructed a production facility in Monterrey where it will employ 180 and make driveline components for the North American wind-energy market.

Mexico’s wage costs will not be as low as in the cheapest Asian countries, but as demand spikes in North America for all things clean tech, the nation’s fortuitous proximity could solidify its permanent foothold in the industry’s labor landscape.

click to enlarge

2. Feed-In Tariffs Whet Renewable Energy Appetites, Spur Job Growth

Government policy is always an important factor in determining where companies, and jobs, gather. For clean tech this is doubly true, as many newer clean technologies are not yet cost-competitive with much more mature and long-subsidized fossil-fuel technologies. One policy known for creating world-leading markets is the performance incentive known as a feed-in tariff, or FIT.

FITs – policy mechanisms offering stable payment to generators of renewable electricity through long-term purchase agreements – are responsible for approximately 75 percent of global PV and 45 percent of global wind power deployment, according to a 2010 report by the U.S. DOE’s National Renewable Energy Laboratory. It’s no wonder that this policy tool is also lauded for its ability to attract companies and create jobs.

The most prominent example of a FIT’s industry-creating power is Germany, where a country with less than stellar solar resources became a world leader in PV production and deployment. In the United Kingdom, a newly enacted FIT is being noted as the cause for job growth. British solar project developer Solarcentury said in August that it witnessed sustained job growth in the first six months following the government’s implementation of a FIT program. The company’s workforce, which stood at 200 in January 2010 and reached 350 by August, is expected to reach well over 500 by 2011. Ontario, Canada is another example of FITs’ industry magnetism. The province has attracted major investment promises from companies like Canadian Solar and Siemens since its aggressive FIT was enacted last year, with much credit given to domestic content requirements included in the legislation.

Successful implementation of a FIT is a difficult achievement – appropriate payment levels are often elusive and any abrupt rate adjustment can invite a boom-and-bust scenario. Nevertheless, this policy mechanism has proven powerful and will continue to play an integral role in clean-tech job creation and product deployment.

click to enlarge

3. Tomorrow’s Auto Industry: Where Does American Labor Stand? Obama Spending Billions to Keep U.S. in the Game

As efficient and clean transportation methods replace the inefficient, mostly fossil fuel-powered vehicles of today, the spoils of tomorrow’s auto industry will be won by those on the forefront of advanced transportation technology development and product manufacturing. For the U.S., the birthplace of modern automobile production and home of the “Big 3,” there is much to be lost here in terms of profits, and more importantly, jobs.

Understanding this risk, the Obama Administration has injected billions to beef up research and manufacturing efforts, hoping to ensure U.S. companies a seat at the table in the 21st century auto industry. The nine U.S. stimulus-funded EV battery plants mentioned earlier are only the tip of the iceberg. By 2012, the White House hopes to have 30 factories in the U.S. accounting for 20 percent of the world’s output of high-performance auto batteries, up from just two factories producing two percent of global supply in 2009.

The government has also become a major funder of up-and-coming electric car companies. In January, the DOE closed a $465 million loan to electric-car maker Tesla Motors. Three months later, the DOE closed a $528.7 million loan with Fisker Automotive, a startup developing plug-in hybrid electric vehicles. These loans are intended to create several thousand U.S. manufacturing jobs and save or create thousands more jobs for domestic parts suppliers.

It can be assumed that developing nations, with large amounts of cheap labor, will claim the driver’s seat in manufacturing tomorrow’s advanced transportation technologies. But from the billions of government dollars spent on development of electric cars and related products, the Obama administration hopes to at least earn the U.S. a spot riding shotgun.

click to enlarge

4. Energy Efficiency - Clean Energy’s Better Half

In the U.S., with annual electricity consumption at approximately 14,000 kWh per capita – roughly double the consumption rate in the European Union and five times the world average – energy efficiency measures should be the first thing on the mind of each and every clean-energy advocate.

In Clean Tech Job Trends 2009, we examined energy efficiency’s role in avoiding the need for new generating capacity, and how efficiency is also the most cost-effective way to create jobs on a dollar investment basis.

Eager supporters of clean energy, however, sometimes overlook the easy efficiency fixes and instead channel enthusiasm – and dollars – towards the generation of renewable energy. This is likely to change as renewable-generation companies like U.S.-based solar project developer SolarCity in Foster City, California, begin to embrace efficiency improvements as a cheap and productive way to reduce and clean up energy consumption.

click to enlarge

In May, the company acquired Building Solutions, a developer of home energy audit software.

SolarCity will use Building Solutions’ technology to offer energy audits to its residential solar customers, allowing for amplified energy-saving benefits. The marriage of these two services is likely to prove fruitful and could usher in an era in which solar project designer and home energy auditor exist in the same job description.

Framingham, Massachusetts-based Ameresco is another dual player in energy efficiency and renewable energy. The company, which went public on the New York Stock Exchange this July, helps large clients improve facility energy performance through efficiency services and onsite generation projects. Ameresco, looking to expand upon 2009’s revenue total of $428.5 million, in August acquired energy-efficiency service provider Quantum Engineering and Development. Quantum’s workforce will join Ameresco’s 650 employees to strengthen its combined offering of efficiency and renewables.

click to enlarge

5. Global Competition Heats Up For Emerging Offshore Wind Industry

In the summer of 2010, all eyes were fixed on the Gulf of Mexico as BP’s Deepwater Horizon well leaked more than 200 million gallons of crude oil into the ocean – a reminder that the true cost of energy is never captured by prices at the pump or on utility bills. But elsewhere on the high seas, the offshore wind industry was picking up steam, showing every indication that 2010 would be a record-breaking year for the blossoming industry.

In 2009, annual installed capacity for offshore wind grew 72%, reaching more than 2 GW cumulative global capacity. Europe, the clear offshore wind leader, upped the pace in the first half of 2010 and installed 333 MW through June – well over half of the continent’s 577 MW 2009 total.

From the UK to Denmark, China, New Jersey, and even Great Lakes states such as Ohio, regions are positioning themselves to capture winnings – and jobs – from the continued expansion of offshore wind installations and increased turbine manufacturing demand. The UK, with more than 1 GW installed, understands the industry’s job-creating power – a 2010 Scottish Renewables report estimated that offshore wind could create 28,000 jobs by 2020 in Scotland alone.

click to enlarge

China and the U.S. are also hoping to carve out spots in this traditionally Europe-dominated sector.

China installed its first offshore project in 2009, while the U.S. has finally given the green light to its first offshore project – the highly controversial Cape Wind installation off the coast of Massachusetts. New Jersey also made waves recently by passing a law calling for development of offshore wind energy.

Offshore wind energy has excited many for its ability to deliver clean electrons, provide jobs, and attract investment. As the sector grows, rich wind resources and industry-attracting tenacity will be essential for regions hoping to capture the valuable rewards lingering above coastal horizons.

click to enlarge

Building a Clean-Tech Jobs Future: Five Key Steps

As competition heats up for the jobs of the future, what policies and initiatives make the difference between success and failure? Below is a list of five national policies and initiatives that we believe play a critical role in ensuring a nation’s clean-tech growth and job creation. These aren’t by any means the only national policies that matter, but they represent some of the most important and promising initiatives based on Clean Edge research and analysis.

1. Deploy aggressive national renewable portfolio standards with “teeth.”

As noted above, there are currently more than two dozen states with RPSs. Certainly not all RPSs are created equal, but robust RPSs tend to call for at least 25 percent renewables by 2025 or 30 percent by 2030 – and the strongest of them provide penalties for not meeting stated goals. While approximately 30 countries currently have national RPSs, the U.S. isn’t one of them. We believe that the lack of a strong and robust RPS puts countries like the U.S. at a significant disadvantage.

Nations that want to lead in the coming decades, and ensure their national security, will need to have aggressive RPSs that use both carrots and sticks to guarantee that their country moves from carbon-intensive energy streams to low-carbon and zero-carbon options.

click to enlarge

2. Support green infrastructure development.

National governments often play a central role in supporting the build out of required infrastructure by being ardent investors, customers, and regulators. Think of what the Internet industry might look like if the U.S. government hadn’t invested in the build out of its predecessor – ARPANET. The clean-tech sector relies similarly on the deployment of new infrastructure, like a smart grid with enhanced, modernized grid infrastructure to carry green electrons and incorporate charging stations to support all-electric and plug-in hybrid vehicles. National governments need to take strong roles in supporting such build outs by ensuring that they walk the walk – with regulatory and policy support to build out critical infrastructure, and to be at the forefront of procuring clean-tech products and services.

click to enlarge

3. Implement – and be sure to enforce – efficiency, fuel, and emissions rules and standards.

We’ve said it before: no energy industry on the planet is regulatory or subsidy free. Nuclear power, decades into its existence, still needs significant regulatory and financial support including billions in loan guarantees and government-backed insurance plans – private insurers won’t take on the liability of nuclear facilities without them. Oil and coal live off the backs of cheap government money and emissions policies that don’t accurately account for the externalities inherent in operating polluting fossil fuel plants. Utilities are basically regulated monopolies, operating their businesses and taking actions in ways supported or discouraged by regulators and their policies. If nations are going to shift their economies to cleaner burning fuels and energy sources, then countries will need to shift their regulatory framework in support of low-carbon technologies and energy sources.

Efficiency, fuel, and emissions standards are all strong tools in this approach. In the U.S., for example, without any real comprehensive carbon-reduction program in place, the EPA could begin to take regulatory actions into its own hands. Indeed, the Supreme Court has already stated that the EPA has the right to enforce clean-air act restrictions on carbon emissions as it does on other forms of pollutants. Barring any highly unlikely, last-minute legislative-backed carbon regime from the current Congress, we expect that day may not be far off.

click to enlarge

4. Establish green banks, bonds, and funds.

In 2009, we published a companion report with Clean Tech Job Trends 2009 that looked at five emerging public financing models for clean-tech deployment. The ideas outlined in the report included such financing innovations as green banks, victory bonds, and revolving loan funds. States like Connecticut and Massachusetts and countries like China and Germany have developed unique funding mechanisms, including state-backed venture and equity funds, and the U.S. needs to do more to support the creation of new financing models that capture the benefits of clean energy and efficiency deployment, while paying for up-front capital costs. The key point here is we can’t simply rely on innovative technologies like new high-efficiency solar PV or algal-based biofuels; we also need innovative financing models to enable the growth of these and many other emerging clean energy technologies.

click to enlarge

5. Implement carbon taxes.

It’s clear that cap-and-trade, at least for the foreseeable future in the U.S., is dead. But we don’t necessarily see that as a bad thing. At Clean Edge we’ve warned of the dangers of a potential cap-and-trade system, with its pricing fluctuations and uncertainty, potential for market gaming, and rampant loopholes.

Microsoft founder Bill Gates, in a recent interview with MIT’s Technology Review, voiced similar support for a tax over cap-and-trade, stating “it’s ideal to have a carbon tax, not just a price on carbon, which is this fuzzy term that includes cap-and-trade.

...Which is more likely: a [hidden] carbon tax with all sorts of markets and options and uncertainties about prices, and traders in the middle, and confusion about who initially gets the most advantage? Or a regulatory thing that says you mark every coal plant in the country with when it has to be retired, and a 2 percent tax to fund the R&D so that utilities know they can buy a plant that’s emitting hardly any CO2?” The Breakthrough Institute estimates that a carbon tax of $5 per ton of CO2 emissions, a price far below most cap-and-trade regime projections, would result in $30 billion a year in the U.S. This could be used for R&D funding, project development, and other clean-tech supports, including a potential rebate for consumers initially hit with higher energy costs in some regions. Historically, taxes have been verboten in U.S. policy circles, but with the failure of cap-and-trade, we believe, like many economists and a growing chorus of business leaders, that a carbon tax is a preferable vehicle.