The renewable energy industry and its proponents regularly draw attention to the industry’s job creation potential. For example, the American Wind Energy Association reported that the US wind industry supported 88,000 jobs at the start of 2016, a 20% increase in one year. The Solar Foundation announced there were over 260,000 solar workers in 2016, which was a 25% increase over the prior year. By contrast, the coal extraction employed only 74,000 workers in 2016, and coal power plants employed another 86,000 workers.
The creation of so-called “green jobs,” such as those in wind and solar, is often cited as a justification for promoting renewable energy through tax credits, renewable portfolio standards and net energy metering.
I recently had the privilege to moderate a panel discussion on green jobs at the Berkeley Energy & Resources Collaborative’s (BERC) Energy Summit. The panelists were the Energy Institute’s Reed Walker; Carol Zabin, Director of the UC Berkeley Labor Center’s Green Economy Program; and Anna Bautista, Vice President of Construction & Workforce Development at Grid Alternatives.
Many economists remain skeptical of green job claims as a motivation for policy. Severin Borenstein has emphasized that job creation claims usually cherry pick data. To understand the effects of a policy on employment one needs to consider the effects throughout the economy. If a policy is promoting a more expensive form of energy, it could very well be destroying jobs on net.
Our panel discussion didn’t address these issues. Instead, the discussion explored equity issues surrounding green jobs. Who benefits? Who doesn’t? Are green jobs “good” jobs?
I left the discussion doubtful that policymakers should view the growth in the number of green jobs as a solution to job losses in other, less green, parts of the energy sector.
Green Jobs Not Much Help to Displaced Coal Miners
At the same time as solar and wind employment is skyrocketing, coal industry jobs are plummeting. Energy Information Administration data shows a 25% drop in coal mining employment from 2008 to 2015. In 2015, 94 coal-fired power plants with a capacity of nearly 14,000 Megawatts closed. Read more about the decline of coal here.
Reed Walker has done research showing just how painful job losses can be to workers. His research looked at how the 1990 Clean Air Act Amendments affected workers in newly regulated firms and industries. The basic idea is to compare workers’ earnings trajectories in newly regulated sectors compared to similar workers in other sectors, before and after the regulations went into place. While many workers were unaffected by the regulatory change, the present-discounted earnings losses for displaced workers after the policy change exceeded their pre-regulation annual earnings. When workers lose their jobs and have to find employment in another industry, their incomes drop significantly, on average.
A recent US Department of Energy report explains why moving from coal mining to renewable energy would be an especially painful transition for workers:
First, the coal job losses and renewable job gains are happening in different places. This means relocation costs pose a significant barrier to workers switching from coal to renewables. Second, renewable energy jobs pay less. The median wage for solar installers is 20% below that of coal miners. Third, the skills needed in an extractive industry like coal mining are very different from those needed in a construction industry like solar or wind.
Putting forward green job creation as the solution to coal industry workers’ woes is unlikely to be well received by miners.
Green Jobs Not Necessarily a Path to the Middle Class
While coal miners might not be landing green jobs, other workers are. Are green jobs sustainable opportunities for these workers? Analysis suggests the reality is mixed.
The majority of green jobs in solar are construction jobs, that is, installing systems. A 2016 report from UC Berkeley’s Labor Center by Betony Jones, Peter Philips and Carol Zabin analyzes differences between construction jobs in the utility-scale segment of the renewable energy industry and jobs in the rooftop solar industry. The study finds that in California most workers in the utility-scale segment earn wages and benefits, and receive training that can sustain a middle class lifestyle. The report attributes this to the fact that utility-scale projects in California employ workers who belong to labor unions or receive equivalent wages and benefits to union members.
Jobs in rooftop solar, on the other hand, pay lower wages and offer more limited benefits. The Solar Foundation jobs report shows that most solar installers (69%) work on these lower paid residential and commercial distributed solar projects, not on the higher wage utility-scale projects.
The report stops short of arguing that renewable energy policy should favor utility-scale renewable energy over roof-top solar. However, in a separate blog, Jones and Zabin cite one of Severin Borenstein’s blogs and point out that environmental and economic objectives provide a rationale for policymakers to favor utility-scale projects over rooftop solar.
Green Jobs Create Opportunities for Some Workers
Green jobs may not be the solution to coal country’s woes or an inevitable path to the middle class. Yet these jobs are providing meaningful opportunities for thousands of people.
In 2016, solar ranked second in employment among energy sectors behind oil/petroleum, but ahead of natural gas. Wind ranked seventh, ahead of nuclear.
Groups like Grid Alternatives are trying to increase the accessibility of renewable jobs to the highest need communities. Grid Alternatives is a non-profit organization that trains people coming from low income and minority communities to work in the rooftop solar industry. Rooftop solar jobs may not be as attractive as utility-scale jobs, but Grid Alternatives’ success in recruiting candidates show that these jobs are still desirable to some workers.
Setting Realistic Expectations
The growth in the green jobs sector has been extraordinary, and many people have benefited, but green jobs do not cure all energy sector job woes. I worry that proponents of green jobs have set expectations too high.
Policymakers and advocates should honestly address the challenges presented by trends in the energy industry. Displaced workers need a sufficient social safety net and workforce training to prepare them for the jobs they are most suited for and most interested in. These may not be green jobs, and that is ok.
Meanwhile, where green jobs are being created, workforce training that connects a wide range of workers to these jobs makes sense. This will help put more green in the hands of people who need it most.
Andrew Campbell is the Executive Director of the Energy Institute at Haas. Andy has worked in the energy industry for his entire professional career. Prior to coming to the University of California, Andy worked for energy efficiency and demand response company, Tendril, and grid management technology provider, Sentient Energy. He helped both companies navigate the complex energy regulatory environment and tailor their sales and marketing approaches to meet the utility industry’s needs. Previously, he was Senior Energy Advisor to Commissioner Rachelle Chong and Commissioner Nancy Ryan at the California Public Utilities Commission (CPUC). While at the CPUC Andy was the lead advisor in areas including demand response, rate design, grid modernization, and electric vehicles. Andy led successful efforts to develop and adopt policies on Smart Grid investment and data access, regulatory authority over electric vehicle charging, demand response, dynamic pricing for utilities and natural gas quality standards for liquefied natural gas. Andy has also worked in Citigroup’s Global Energy Group and as a reservoir engineer with ExxonMobil. Andy earned a Master in Public Policy from the Kennedy School of Government at Harvard University and bachelors degrees in chemical engineering and economics from Rice University.