Oil and gas aren’t the only part of the energy industry getting pummeled during the coronavirus outbreak. A new report says job losses are starting to pile up in the previously fast-growing renewable energy and energy efficiency sectors, too.
The report released Wednesday by E2, Environmental Entrepreneurs, said more than 106,000 workers in the “clean energy” industry lost their jobs in March. The analysis by the national trade organization projects that more than a half million workers, or 15% of the workforce, will lose their jobs in the coming months unless there’s some kind of action by Congress.
Colorado lost 1,080 clean-energy jobs, or 1.6% of the workforce, based on an analysis of U.S. Department of Labor data. The report by E2 said Colorado’s job losses were among the smallest. A second report by E2 said there were a total of 62,420 clean-energy jobs in Colorado at the end of 2019.
The clean energy sector, which includes wind and solar energy, energy efficiency and electric vehicles, was one of the fastest growing before the COVID-19 pandemic hit. Clean energy jobs had grown 10.4% since 2015, totaling nearly 3.4 million at the end of 2019, according to E2.
In February, Colorado’s solar industry, which grew nearly 5% in 2019, reported having more jobs than it could fill.
That was before coronavirus. A staggering total of roughly 22 million jobless claims were filed in the last month as businesses and activities have been shut down to curb the spread of the infectious disease.
In Colorado, more than 150,000 people filed claims during the month, according to figures released Thursday by the Colorado Department of Labor and Employment.
“There are significant impacts with so much of the economy being shut down. Clean energy is not spared in that,” said Will Toor, executive director of the Colorado Energy Office.
A big concern of the solar and wind industries is the “step-down” of the size of tax credits, Toor said. Gov. Jared Polis has made it clear to Colorado’s congressional delegation that he sees extending those credits as a priority. Financing for many renewable projects was based on being able to use the tax credits “but delays from both the immediate crisis and longer-term economic fallout threaten the ability to meet the deadlines for phase down of the credit,” Polis wrote in an April 9 letter to the delegation.
“Colorado is at the epicenter for renewable energy development. In addition to the thriving small-scale solar industry, our utilities have adopted plans for about 3,000 megawatts of wind and solar over the next five years,” Polis wrote.
For solar construction, customers and investors could deduct 30% of the cost of installing residential and commercial solar systems in 2019. The credit decreased this year to 26% and will drop to 22% in 2021. Starting in 2022, the tax credit for commercial projects drops to 10% and disappears for residential systems.
Another recommendation supported by the renewable energy industry is making the tax credits refundable, which means giving customers and investors the option to take direct payment in place of a tax credit. The Solar Energy Industries Association said that was done on a temporary basis in 2009 in response to the Great Recession.
In the last week or so, more Colorado solar companies have been letting employees go or placing them on furlough as the economic downturn has worsened, said Mike Kruger, president and CEO of the trade group Colorado Solar and Storage Association. Many companies had a backlog of projects, but fewer new projects are on the horizon as the financial fallout grows.
“Our work will continue through the backlog, but given the drop in consumer confidence, orders for future work have slowed considerably,” Kruger said. “That would lead to massive layoffs in the next few weeks. We hope Colorado can get through this epidemic before that happens.”
Scout Clean Energy, which develops, finances and builds wind and solar energy installations in 13 states, is concerned about delays in materials from other countries and how uncertainty will affect financing and the ability to benefit from the tax credits on a timely basis. Mike Rucker, founder and CEO of the Boulder-based company, said the hope is that Congress will include relief for the energy industry in future legislation.
Rucker and Kruger both said they believe that once the economy starts to recover, the clean energy industry will begin growing again because solar and wind energy are increasingly economically competitive with other forms of power. And people have been clear they want to cut greenhouse gas emissions and improve air quality, Rucker said.
“I think that the fundamental economics of energy have shifted as wind and solar have become low-cost sources of electricity. That is going to be just as true after COVID-19 as it was before,” Toor said.
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