April 10, 2012

Grant program supported up to 75,000 wind and solar jobs: congress killed it anyway

A federal grant program created to boost renewable energy development during the height of the economic crisis supported 75,000 jobs and more than $25 billion in economic activity, according to a new analysis from the Department of Energy.

The grant program was created in February of 2009 as part of the stimulus package. It allowed developers to take a cash grant through the Treasury in lieu of a tax credit, helping thaw out the frozen capital markets and stimulate strong activity in the renewable energy sector.

According to the report, Treasury grants supported 23,000 projects across the U.S. and helped add more than 13,000 megawatts of wind and solar capacity to the grid.

Between January of 2010 and December of 2011, the solar market grew 176 percent — driven in part by the availability of grants. The wind sector, which took a deep nosedive after the financial crisis, was able to develop more than 12,000 MW of projects with the support of the program.

In spite of this success, Congress failed to extend the program last year.

The incentive was also offered to biomass, landfill gas, hydro and geothermal technologies; however, the majority of grants went toward wind and solar. The Department of Energy report only tracked job creation and development figures for those two sectors.

It is difficult to isolate the exact influence that grants had on each installation. Some projects may have gone forward without the grant, others may have not. But the analysis does show that the gross economic impact was substantial, particularly along the component supply chain:

Construction- and installation-related expenditures are estimated to have supported an average of 52,000–75,000 direct and indirect jobs per year over the program’s operational period (2009–2011). This represents a total of 150,000–220,000 job-years.These expenditures are also estimated to have supported $9 billion–$14 billion in total earnings and $26 billion–$44 billion in economic output over this period. This represents an average of $3.2 billion–$4.9 billion per year in total earnings and $9 billion–$15 billion per year in output.

  • Indirect jobs, or jobs in the manufacturing and associated supply-chain sectors, account for a significantly larger share of the estimated jobs (43,000–66,000 jobs per year) than those directly supporting the design, development, and construction/installation of systems (9,400 per year).
  • The annual operation and maintenance (O&M) of these PV and wind systems are estimated to support between 5,100 and 5,500 direct and indirect jobs per year on an ongoing basis over the 20- to 30-year estimated life of the systems. Similar to the construction phase, the number of jobs directly supporting the O&M of the systems is significantly less than the number of jobs supporting manufacturing and associated supply chains (910 and 4,200–4,600 jobs per year, respectively).

The findings of this Department of Energy report are line with previous analyses. One report from EuPD Research concluded that an extension of the Treasury grant program through 2015 would create an additional 65,000 jobs in the solar industry alone.

However, Congressional leaders have shown no willingness to extend the successful program. In addition, a key tax credit for the wind industry, the Production Tax Credit, is set to expire at the end of the year. That could destroy another 37,000 jobs in the wind sector, according to industry estimates.


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