Impact of Covid-19 on the Clean Energy Sector

Gina-Marie Cheeseman

Clean energy represents 40 percent of the energy sector workforce in the US. Unfortunately, COVID-19 has shed hundreds of thousands of clean energy jobs since March. Government assistance is needed to restore these jobs, continue growth in the sector, and rebuild the energy economy for the 21st century.

The clean energy sector is another economic casualty to the COVID-19 pandemic. Clean energy-related manufacturing plants were closed due to the virus outbreak, and companies began furloughing and firing workers.

The clean energy sector lost 106,400 jobs in March, representing a three percent drop in employment, and nearly erasing the industry’s growth for the year, according to an analysis by BW Research. The situation will likely worsen. The analysis projects that the clean energy sector will lose over half a million jobs, or 15 percent of its total workforce if nothing is done to help the industry.

Every clean energy sector is affected

Every clean energy sector is affected by the economic crisis caused by the pandemic. Energy efficiency, the largest clean energy sector, experienced the most job losses in March, losing 69.800 jobs or nearly three percent, which represents two-thirds of clean energy job losses from March to April. Renewable electric power generation and alternative transportation lost over 16,500 and 12,300 jobs respectively. Clean fuels and clean transmission, distribution, and storage lost 3,400 and 4,300 jobs, representing about three percent of their workforce.

The wind industry represents the largest source of renewable energy in the U.S. and provides over 114,000 jobs, according to an analysis by the American Wind Energy Association. The pandemic could put more than 35,000 jobs in the wind industry at risk and jeopardize $43 billion in investments and payments to rural communities.

The solar industry will employ 114,000 fewer workers by June, according to an analysis by the Solar Energy Industries Association, representing a 38 percent drop in solar jobs. The job loss will revert the industry to 2014 levels. The solar industry is losing jobs at a faster rate than the entire U.S. economy. A 37 percent drop in second-quarter solar installations occurred. The solar industry lost 65,000 jobs since the end of February due to the pandemic.

The clean energy sector needs government help

The American Wind Energy Association and the Solar Energy Industries Association sent a letter to Congress. The organizations asked “for policies that can sustain our member companies’ ability to operate and keep planned investment and job-generating deployment on track in the face of this crisis and realize the benefits that Congress has already created for the wind and solar industries.” One of those policies the letter asked for is an extension of wind and solar commence construction and safe harbor provisions. Another policy mentioned in the letter is the ability to receive direct payments for tax credits.

Six U.S. senators sent a letter to Treasury Secretary Steven Mnuchin asking him to “extend the continuity safe harbor, provided under existing Treasury Department guidance, for both the production tax credit (PTC) and energy investment tax credit (ITC), from four years to five years for projects that started construction in 2016 or 2017.” Doing so would help save tens of thousands of jobs and billions of dollars in investments, according to the letter.

A report by E2 calls for big infrastructure projects to help both the American economy and the clean energy sector recover. One of those projects could be fixing the country’s power grid, which needs around $30 billion to $90 billion to upgrade transmission lines to be able to handle new renewable energy transmission and repair old equipment to prevent wildfires. Another project could be building a national electric vehicle charging network.

Government policies to help the clean energy sector recover would help the entire U.S. economy recover. The clean energy sector has the ability to quickly bring economic benefits, as E2 points out. Clean energy jobs represent around 40 percent of the U.S. energy sector workforce. In 2019, clean energy accounted for over half (55 percent) of the energy sector’s net employment. Clean energy employs about three times the amount of workers as the fossil fuel industry. In 2019, the number of clean energy jobs added was almost five times greater than fossil fuel jobs added.

Comments

Energy & Economics

FEATURED
COMMUNITY