The Impact of the Coronavirus on the Renewable Energy Industry
Scientists and experts around the globe agree that to mitigate the worst consequences of climate change, the world must transition to a 100 percent clean future powered by clean energy sources as soon as possible. Now, with the rapid spread of COVID-19 across the nation leading to a historic health and economic crisis, the renewable energy industry at the heart of this transition is suffering from the same uncertainty and impending job losses as many other sectors.
Since taking office, President Donald Trump and his team have taken unprecedented steps to suppress the growth of the renewables industry: A Center for American Progress Action Fund analysis finds that the Trump administration’s policies have led to the loss or suppression of more than 600,000 jobs in the renewable energy sector. Notably, this analysis does not account for the significant disruptions that COVID-19 has and will cause in the industry—a risk that the administration has so far not taken seriously. In fact, rather than taking proactive measures to mitigate these disruptions to the renewable energy industry during the pandemic, President Trump has managed to instead prop up the fossil fuel industry at every turn.
In the past weeks, there has been a growing emphasis on how to sustainably rebuild the economy in the wake of the novel coronavirus—for example, through plans such as a “Green Stimulus.” A national survey of likely voters showed that 74 percent support public investment in renewable energy. If Congress does not support the maintenance and growth of the clean energy industry in a future stimulus or economic recovery package, the renewable industry could face job losses of up to 50 percent in some subsectors. Such losses would hurt workers and their families and set the United States back even further in the fight against climate change. In addition to needing critical, forward-looking economic assistance, the renewable energy industry is ripe for investment: It is a burgeoning employment sector and a necessary component of a clean rebuild of the U.S. economy in the wake of the coronavirus crisis.
This column assesses the initial impacts of the coronavirus on the renewable energy industry. It then compares the industry’s growth under the two presidential administrations since 2008 and highlights the ways in which the Trump administration has not only halted the creation of wind, solar, and other clean energy jobs across the country but also potentially exacerbated the number of jobs that may be lost in this sector due to the COVID-19 pandemic. Finally, the column outlines actions that Congress should take in a future stimulus package to support the renewable energy sector and encourage robust and healthy job growth in the industry.
Trump is undermining the renewable energy industry and its workers during this pandemic
Already, the rapid spread of COVID-19 has affected nearly every corner of the U.S. and global economy. In late March, as the Senate and House worked to negotiate and release the third relief and stimulus spending package in response to this unprecedented national emergency, solar, energy storage, and other subsets of the renewable energy industry—which employs an estimated 3.4 million Americans—began to raise the alarm bells with Congress.
The Solar Energy Industries Association (SEIA) predicts that the solar sector could lose up to 120,000 of its nearly 250,000 jobs—approximately half of its workforce—in the face of this crisis. For industries such as solar that rely significantly on residential installations and door-to-door education—involving the kind of in-person contact that social distancing forbids—employment is especially at stake. Moreover, according to the U.S. Energy Storage Association, nearly two-thirds of energy storage businesses are already seeing project delays as a result of COVID-19, which has led to an “immediate and potentially devastating” impact. Although sheltered from impacts in the United States so far, the wind industry is also suffering severe shocks to its supply chain and employment. According to E&E News, the industry “could be among the world’s most deeply affected by the new coronavirus outbreak.” The wind industry has warned that more than a third of its U.S. workforce could lose jobs as a result of the virus.
Likely due to the need to focus on the immediate health response, Congress did not include any sort of specific funding for the renewable energy industry in its third relief package, such as an extension of the investment tax credit or direct payments to companies to keep them afloat. That decision came despite pleas from the industry. For example, in a letter to Congress with more than 500 signatories, the SEIA explained: “This crisis impacts not just companies but workers. It will be challenging for employers to continue employment without any revenue, and the longer the crisis goes, the more difficult it will get.”
Meanwhile, President Trump and his congressional allies have openly mocked and dismissed the appeals for clean energy support in a stimulus. Some reports even indicate that Trump was personally involved in removing from the final package the clean energy tax extenders that had been part of the House version of the third coronavirus relief bill. Meanwhile, U.S. Secretary of the Treasury Steven Mnuchin recommended that the president and Congress consider a specific bailout for the fossil fuel industry—which at one point totaled $20 billion—despite the significant federal subsidies that these companies already receive. Although Congress ultimately passed the third stimulus package without any specific fossil fuel provisions, the administration is continuing to look for ways to finance the same fossil fuel bailout while being openly hostile to renewables. Worse still, the Trump administration has used this uncertain and scary time as an opportunity to give other forms of requested regulatory relief to the fossil fuel industry, much to the dismay of those in Congress who would rather see agencies focus on a direct response to COVID-19 that does not exacerbate existing health problems.
Growth in the renewables industry has been strong, but has slowed under Trump
When considering the scale and impact of the current crisis for the renewable energy industry, it is important to put the predicted job loss figures noted above in context. Overall, and unlike the fossil fuel industry, the renewable energy industry has experienced relatively steady and strong growth over the past decade, though that growth has slowed noticeably under President Trump.
The level of clean energy deployment under the Obama administration led to explosive growth in electricity production from 2008 to 2016. Wind power, for instance, quadrupled its share of electricity production while solar power saw a 40-fold increase, helping to spur massive job increases during this time; from 2010 to 2016, jobs in the solar energy industry jumped from approximately 94,000 to 260,000. Yet President Trump has taken to openly mocking the renewable energy industry, making false claims about wind turbines and issuing misleading, inflammatory statements on the reliability of the resources. Trump’s actions have matched this rhetoric: Under his administration, 2019 solar industry job numbers have yet to catch up to where they were in 2016, at the end of the prior administration. In 2019, there were approximately 248,000 solar workers—defined as those who spend at least 50 percent of their time on solar-related work—compared with slightly more than 260,000 in 2016.
This opposition to renewables makes little sense, as the employment opportunity that the industry presents is enormous and already ripe for the picking. In recent years, renewables employment has significantly outpaced the employment in the fossil fuel industry; in 2019, the solar and wind industries combined employed four times as many workers as the coal industry. Future projections reinforce this story. In a recent report, which does not account for impacts of the novel coronavirus, the American Wind Energy Association estimated that the offshore wind industry will invest between $28 and $57 billion in the U.S. economy and support between 45,000 and 83,000 jobs by 2030, depending on installation levels and supply chain growth. This level of job growth and investment could be an enormous opportunity for the Trump administration in a future stimulus package. Unfortunately, the administration’s preferential treatment of the fossil fuel industry has both failed to bring back dwindling jobs in that sector and gone so far as to stall or kill the creation of new, clean energy jobs.
Previous Trump administration policies have threatened the renewables industry
According to a recent Center for American Progress Action Fund analysis, the Trump administration’s efforts prior to the spread of COVID-19 have so far undermined or suppressed the growth of at least 600,000 renewable energy jobs. Below are some of the most egregious anti-renewables efforts, which have ultimately left the industry in a more disadvantaged place than it otherwise would have been amid this economic crisis caused by the novel coronavirus.
- Regulatory actions: In 2019, the Trump administration repealed and replaced the Clean Power Plan (CPP), an Obama administration policy that would have required reduced emissions from power plants, incentivizing renewable energy growth in the process. An E2 analysis showed that the CPP—had it been implemented in 2016—would have created up to half a million new renewable industry jobs by 2030. The replacement plan—the Affordable Clean Energy rule—would encourage far fewer renewable energy buildouts and no new jobs.
- Economic policies: In January 2018, as part of his half-baked protectionist trade policies, President Trump placed tariffs on imported solar cells and modules for the next four years, making solar energy development more expensive and less economically competitive, leading to job losses and project delays.
- Legislative and fiscal policies: Late last year, Congress—at Trump’s urging—explicitly excluded from the tax extenders bill it passed critical tax credit provisions for solar, wind, electric vehicles, and energy storage technologies, stunting the creation of new clean energy jobs. The Trump administration has also repeatedly cut from agency budgets funding for renewable energy development.
- Blocking of renewable development on federal lands: Under the Trump administration, the U.S. Interior Department’s Bureau of Land Management has failed to hold a single competitive lease sale on public lands for wind and solar, despite an Obama-era rule empowering the department to do so. Similar roadblocks have occurred offshore: In August 2019, the Bureau of Ocean Energy Management ordered an eleventh-hour sweeping environmental review of all proposed Atlantic offshore wind projects, delaying Vineyard Wind and creating obstacles for six gigawatts of other planned offshore wind facilities in the Atlantic.
How Congress can support the renewables industry as it faces the coronavirus
The last time the United States was faced with an economic recession of this scale, Congress passed the American Recovery and Reinvestment Act (ARRA) of 2009, which set a precedent for successful clean energy stimulus programs that also benefited the U.S. economy as a whole. ARRA’s investments successfully tripled solar generation capacity over two years and increased wind generation capacity by 60 percent over two years.
If Congress is serious about helping to stabilize the renewable energy industry and its employment numbers in the wake of this most recent crisis, as well as creating new, good-paying jobs for the future economy, there are ways it can do so in a future stimulus package. Any forward-looking stimulus package should include extensions of the clean energy tax credits that are in the process of phasing out, modeled after Sen. Ron Wyden’s (D-OR) amendment to the American Energy Innovation Act. The tax credits should also be made refundable, and Congress should extend so-called “commence construction” and “safe harbor” provisions for wind and solar to ensure that current projects facing COVID-19-related disruptions are still able to use the full tax credit for which they qualify. If an economic downturn is expected to reduce tax liability for clean energy businesses, a reinstatement of ARRA’s Section 1603 grant in lieu of taxes would be an alternative option. In addition to extensions of the federal wind production tax credit and the solar investment tax credit, the electric vehicles tax credits should be amended to increase manufacturer caps, and new energy storage credits should be implemented, following the Energy Storage Tax Incentive and Deployment Act.
Despite the lessons from ARRA, Trump and his team seem to only be focused on the bottom lines of fossil fuel executives and, in the process, are failing to keep their promises to workers. The jobs lost due to the efforts highlighted above are just part of the picture. The Trump administration’s refusal to support the renewables industry with market-based incentives, infrastructure grants, and research and development investments marks a missed opportunity to invest in a burgeoning industry of high-paying, stable unionized jobs at the outset of its growth. With no clear vision for the future of renewables and no support for the current industry, as well as a misguided effort to prop up dying energy sectors at the industry’s expense, the Trump administration has abandoned its promise to help American workers.
It is now up to Congress to invest in the future of clean energy and climate action by investing in the renewable energy industry in any forthcoming stimulus packages. Workers in this industry deserve it, and Congress would be helping to build a sustainable economy while investing in a clean future for the United States.
Bianca Majumder is a research associate for Energy and Environment Policy at the Center for American Progress. Sally Hardin is a deputy director at the Center. Claire Moser is a director at the Center.
The authors would like to thank Nicole Gentile, Trevor Higgins, Miriam Goldstein, Kate Kelly, Bidisha Bhattacharyya, and Thomas Waldrop, as well as Meghan K. Miller and Steve Bonitatibus, for their contributions to this column.
To find the latest CAP resources on the coronavirus, visit our coronavirus resource page.
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