TODAY’S STUDY: THE LATEST ON NEW ENERGY JOBS
Clean Energy Works For Us: First Quarter 2014 Report
May 22, 2014 (Environmental Entrepreneurs)
From commercial-scale solar developments to energy-efficient recycling projects, clean energy and clean transportation continues to create jobs and drive economic growth. By tracking job announcements from companies, elected officials, the media, and elsewhere, Environmental Entrepreneurs’ (E2’s) jobs reports show how and where clean energy works in the United States.
Clean Jobs Fall In Q1
Nearly 5,600 clean energy and clean transportation jobs were announced throughout the U.S. in the first quarter of 2014. This is a significant decline from the previous two quarters. The decline stems in part from the expiration of federal tax credits critical to leveling the playing field for renewable energy and energy efficiency technologies, like wind, solar, and energy efficient lighting, continuing attacks on state clean energy policies, and low natural gas prices. Because of ongoing regulatory uncertainty and other energy sector trends, businesses held back investments that would likely have led to more hiring in the clean energy and energy efficiency sectors.
As a result of the decline in job announcements, a lone geothermal project was enough to propel Idaho, which had not ranked in the Top 10 in any previous quarter, to the top spot. Idaho was immediately followed by more traditional top performers. The remaining states in the Top 10 were: TX, CA, MO, NY, KS, AZ, HI, NM, and LA.
Texas ranked 2nd with four announcements, including two wind and one solar farm announcement with a combined capacity of 249 MW. Louisiana was a newcomer to the Top 10, thanks to recycled plastic railroad tie maker IntegriCo Composites’ new manufacturing facility in Webster Parish.
Looking at individual sectors, geothermal had one of its strongest showings since E2 began tracking job announcements in 2011. E2 tracked more than 1,000 job announcements from the geothermal sector in Q1, including 800 planned jobs from Aguacaliente’s 25 MW project near Malta, Idaho. This was one of three geothermal projects announced this quarter to take advantage of the Production Tax Credit (PTC) revised construction eligibility rules, despite its expiration in December.
Looking ahead, the Environmental Protection Agency’s anticipated rollout of carbon pollution standards for existing power plants in June could offer more certainty and opportunities for growth in the clean energy industry. By ensuring carbon is regulated from these power plants for the first time, clean, renewable sources of energy like sun, wind, and geothermal and energy efficient technologies, like more efficient lighting and appliances, insulation, and system controls, could play a significant role in helping states to cost effectively meet the standards and potentially lead to substantial increases in the number of clean jobs announced in the coming years.
Solar Growth Shifts From Utility To Residential Market
2013 was a record year for utility-scale solar as more than 2,800 MW of generation was installed, a roughly 60 percent increase from the previous year. However, in Q1 2014, the sector accounted for just 1,400 jobs announced – a significant decline from previous quarters. This finding reinforces previous E2 analyses from last year, projecting a slowdown in announcements as a result of policy uncertainty.3
One of the main reasons for the slowdown is that utilities in solar-rich Western states like California and Nevada are currently exceeding their mandated targets under their respective state Renewable Portfolio Standards.
Additionally, the looming 2016 expiration of the Investment Tax Credit (ITC) has led large-scale projects that require long lead times to be reconsidered. The first round of the Department of Energy’s loan guarantee program – which created an estimated 7,200-plus jobs4 in the utility-scale solar sector – is also sunsetting. The Department plans to shift its financing support from large- scale wind and solar projects to grid integration, energy storage, and efficiency initiatives moving forward.
While utility-scale solar project announcements are shrinking, residential solar is growing rapidly – and not just in the traditional hotbed of California. For example, in Q1 Vivint Solar announced it was opening three offices in New Jersey. The company is hiring 200 sales employees, installers, electricians and other staff. Solar City announced it will employ an additional 15 staff in Long Island, N.Y., tripling the size of its regional office. Both companies cited that state policies in New York and New Jersey are providing transparency and long-term certainty to invest in the region. Specific policies include strong net metering and grid integration standards, which empower consumers to sell electricity they generate back to the grid.
Looking ahead, distributed solar generation appears poised for continued growth as traditional financing barriers evaporate; solar module prices drop from further economies of scale; and innovative financing models such as vertical integration, solar securitization, and crowd-funding gain a foothold in the market.
No Wind PTC = No Jobs
The PTC is a federal incentive offering a per-kilowatt hour tax credit to developers of renewable generation, including wind, geothermal, and certain forms of biogas and hydropower. Without policies that account for the social cost of carbon, the PTC helps level the playing field for wind energy and other technologies to compete with natural gas and other fossil fuel technologies that receive permanent federal subsidies.6
In 2012 alone, this tax credit helped the wind industry drive $25 billion in private investment into the economy.7
But at the end of 2013, Congress let the PTC expire, halting the momentum of a rapidly growing industry. The American Wind Energy Association reported 30,000 job losses in 2013 as a result of uncertainty over the extension of the PTC. This past quarter, wind turbine manufacturer Gamesa announced the closure of its facility in Edensburg, PA, eliminating 62 jobs.8
As long as federal tax extenders remain in limbo, renewable technologies will remain stuck in a boom-bust cycle dictated by the whims of Washington and investors will likely be cautious to direct capital to new projects in the U.S.
Building-Efficiency Job Announcements Sluggish, But Potential Remains
Since 2011, E2 has tracked an average of 1,900 announced jobs in the building efficiency sector each quarter. However, in Q1 2014, only two companies made announcements. Combined, these businesses plan to hire 325 workers. This drop may be attributed to the recent expiration of federal tax credits supporting commercial and residential construction and retrofits, including three provisions of the 2005 Energy Policy Act:
-Tax deduction for the construction of efficient commercial buildings (Section 179D)
-Tax credit for the construction of efficient homes (45L)
-Tax credit for investment in residential efficiency improvements (25C)
With ongoing uncertainty over Congressional extension of these tax credits, businesses and municipalities are hesitant to make investments in building efficiency. Earlier this year, the National Association of Energy Service Companies urged the Senate to extend the 179D provision, noting “incremental energy efficiency projects enabled by the availability of Section 179D create and sustain much needed jobs in the construction, engineering, manufacturing and design sectors.”
Addressing building energy use can lead to big energy savings – and big job gains. An Institute for Market Transformation analysis estimated the creation of a national building energy rating and disclosure policy could create up to 59,000 jobs and save building owners $18 billion through 2020. The same study indicated the energy savings gained would take the equivalent of 3 million cars off the road.9
Energy efficiency is popular: Nine in 10 likely voters support energy efficiency as a key part of the solution addressing our energy challenges…
To preserve existing jobs and to ensure new ones can be created, Congress must act quickly to enact long-term extensions of federal tax credits for wind, solar and energy efficiency. In the meantime, states can demonstrate the types of clean energy leadership that’s absent in Congress by supporting policies like state-level energy efficiency and renewable portfolio standards and net metering. States can also help create clean jobs within their own borders by leveraging their growing energy efficiency and renewable industries to prepare for the Environmental Protection Agency’s rollout of carbon pollution standards in June.