It’s all about the green economy, stupid.
The United States could lose more than 116,000 green collar jobs and forgo $19 billion in green tech investment in 2009 if Congress fails to extend two tax credits crucial to the renewable energy industry, according to a new study.
One red flag about this report: It was commissioned by the American Wind Energy Association and released by the Solar Energy Industries Association — two trade groups pressing for extension of the investment tax credit and the production tax credit. Green Wombat tends to look askance at studies paid for by business and whose conclusions support the sponsors’ political agenda. But a review of the research conducted by Navigant Consulting indicates that it is solid, based on federal labor data and employment models as well as Navigant’s own market analysis.
Some background. The ITC provides a 30 percent tax credit for the installation of solar arrays and other equipment. Homeowners can claim the tax credit up to a maximum of $2,000 for residential solar arrays. There’s no cap for commercial solar arrays and the tax credit has been a key to attracting financing for large solar installations that can cost millions of dollars. (Several states, most notably California, offer even more lucrative incentives, which should help prop up demand.) The production tax credit provides a subsidy for the generation of electricity by solar, wind, geothermal and other renewable energy systems and has driven the construction of massive megawatt wind farms.
Both credits expire at the end of 2008 and the renewable energy industry and their allies in Silicon Valley and on Wall Street are pressing Congress for a long-term extension — five to eight years — to provide a stable investment climate for green projects. (Last week, executives from Google (GOOG), Hewlett-Packard (HPQ), Applied Materials (AMAT) and Credit Suisse (CS) were among those that signed a letter urging Congress to take action by March 1.)
The Navigant study projects that without the investment tax credit installations of solar arrays will fall from a projected 790 megawatts to 325 megawatts in 2009, eliminating 39,400 potential new jobs.
A couple of points to consider about those numbers. Navigant only considered the impact on the photovoltaic industry that manufactures and installs rooftop solar arrays. It did not calculate the consequences for the solar thermal business, which builds large-scale solar power plants that use mirrors to focus the sun’s rays on liquid-filled tubes or boilers to create steam to drive electricity-generating turbines. The solar thermal industry is in its infancy but utilities like PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE) have signed several contracts for solar power plants and negotiations for gigawatts more of solar electricity are ongoing.
The first solar power plants in California won’t go online until around 2010 but the construction and operation of those projects are expected to create thousands of jobs. Like the PV industry, solar thermal companies are dependent on the investment tax credit to attract the big money it takes to finance the construction of billion-dollar power plants. The loss of the investment tax credit would hit California particularly hard.
While rooftop solar companies worry about losing business in the future if the investment tax credit is not renewed, the more immediate concern among solar execs Green Wombat has talked to recently is finding enough workers to keep up with demand, especially in California.
Navigant projects an even bigger crash for the wind industry should the production tax credit expire, with installations falling from 6,500 megawatts to 500 megawatts in 2009 with the lose of 76,800 jobs. The wind industry has been continuously buffeted in recent years as Congress has allowed the production tax credit to expire repeatedly only to resuscitate it. In the past, the expiration of the tax credit has resulted in a 73% to 93% drop in the wind market, according to Navigant.
Green Wombat 
Lets pass this energy tax credit and begin down the road of energy independance. Oh I forgot baseball steroids are our most pressing issue at the moment,silly me.
Our great country could become the leader in alternative energy R&D as well as the leader in the fight against global warming, what are we waiting for? Wake up America!
Global warming is a joke but becoming energy indepedent is not. I’d rather invest in our own energy sources than send $ overseas at $100/barrel of oil.
Interesting clip, off grid, energy independent.
Geo, hydro, wind, solar, hydrogen, the future is now.
I think that the government needs to step up and support these programs. We really need to foucs on green technologies.
Entrenched industries such as coal and oil receive subsidies that keep the price of energy low in the US — and new technologies have a hard time breaking those subsidized cost barriers. New technology is always expensive — what we need is clear vision about our longterm wellbeing. Who will do the homework needed to shape that vision?
I work in the Domestic Oil and Gas industry. We are contantly competing for investment dollars against foreign projects.
Domestic Oil revenues support US based jobs, they are distributed to US Royalty Owners. They also go to share holders who include individuals, pension funds, and mutual funds, many of which live, or serve people who live in the US.
Congress is hurting US companies. Copanies that support the US economy. They won’t touch Lukoil (Russia) Totale (France), ARMCO (Saudi Arabia), CNOCO (China) Pdveza (Venezuala), Pemex (Mexico) or hundreds of other foreign companies who sell into the US market and take US dollars home their countries. In fact in crippling US companies they help these foreign competitors.
Smooth move, Congress get mad at someone who is hurting you so you shoot the person standing next to them who is working for you.
Save your words, Peak Oil is here and we are screwed no matter what we do. To little to late, and this time our complacency and ignorance is going to be the end of us…We should have had substantial solar, geo thermal, tidal and wind generation capabilities on line a decade ago. With oil demand outstripping supply and no known alternatives we have irreversibly passed a global tipping point. The consequences will be immense and extremely diruptive. Is it not ironic that running out of the very thing that is destroying our environment will ultimately lead to the undoing of society as we know it. Welcome to the next Great Depression….
You reported that the 280-megawatt solar power plant to be built 70 miles southwest of Phoenix will be built by Spanish company Abengoa Solar. It might be interesting to look into why they got the contract, not an American company and if US taxpayers should be providing tax breaks that benefit foreign companies and workers.
Also, “peak oil” hasn’t been reached. In the US, Congress and environmental activist groups have restricted or eliminated access to reserves for the past 30 years! They best to raise energy prices to help their friends in the alternative energy world, and have hurt many Americans whose jobs are going overseas because natural gas prices are far higher here than elsewhere. Oil companies have done a tremendous job providing esseential energy and employment, given the restrictions the US government put on their ability to function. For instance, offshore they only have access to 10% or less of the area under US control. US energy policy is like the unlateral disarmament that was preached by some during the Cold War.
Rather than whine and wait for the technological Messiah which will suddenly save us all, we need to be putting $$ into clean coal and ghg controls for internal combustion engines as well as into potential alternative energy systems.