With Inflation Reduction Act in Hand, Renewable Energy Wins Job Creation Battle

Fossil energy advocates have long used the carrot of job creation — and the stick of job loss — to make their case, regardless of the impact on the environment and local communities. That argument has lost force in recent years, and now the Inflation Reduction Act will finally put it to bed by accelerating the creation of tens of thousands of new jobs in clean energy fields.

Follow the money: U.S. clean energy industry capitalizes on falling costs of wind and solar

The job creation argument was a solid one for fossil energy stakeholders until the cost of wind and solar energy began to drop in the early 2000s. 

Before then, hydropower was the only utility-scale, zero-emission alternative for electricity generation in the U.S. However, the availability of hydropower is limited by circumstances of geography. Similarly, the U.S. geothermal industry has been limited by the availability of suitable sites.

In contrast, solar panels and wind turbines can be located throughout the country, including coastal waters in the form of offshore wind farms.

Former President Barack Obama’s SunShot initiative helped to foster the steep drop in the cost of solar power. The program aimed to improve solar cell efficiency and lower the cost of solar panels and other hardware, as well as streamline permits and reduce other “soft” costs. The U.S. wind industry also benefitted from federal R&D programs promoted by the Obama administration. 

Despite setbacks, renewable energy is here to stay

When Obama left office, former President Donald Trump took a number of steps aimed at supporting fossil energy stakeholders. That included summarily pulling the U.S. out of the 2015 Paris Agreement on climate change. Nevertheless, federal support for wind, solar, and other renewables continued during his administration through ongoing programs at the Department of Energy, as well as other key agencies including the Department of the Interior and the Department of Defense.

Stakeholders in the utility sector also continued to plan for the end of coal power during the Trump administration, and the business community continued to push the market for renewable energy through organizations like the Renewable Energy Buyers Alliance.

The stage is set for next-level action

By the time President Joe Biden took office, wind and solar were firmly established in the U.S. energy landscape, though with mixed success on a state-by-state basis.

The new Inflation Reduction Act is designed to steamroll over state-based policies that have been holding back wind and solar development. In an August analysis, the trade organization America’s Clean Power described the IRA as “the single largest investment in renewable power in the history of this country, and the largest investment in climate action to date.”

Among other provisions, the bill extends production tax credits for wind and solar, establishes a new tax credit for energy storage systems, and incentivizes domestic supply chain manufacturing. “It’s hard to understate the transformative impact that the IRA will have on the country’s electric grid — not to mention the broader climate benefits,” America’s Clean Power wrote, emphasizing that the new law provides stability and predictability in federal energy policy.

On a preliminary basis, America’s Clean Power estimated that the new law will generate $600 billion in capital investment and foster the development of 525 to 550 gigawatts of new clean power.

That activity is expected to create approximately 550,000 new jobs in clean energy industries, more than doubling the current clean energy workforce. In comparison, the organization estimates that a business-as-usual scenario would result in just 335 gigawatts of new clean power capacity.

Closing the door on destructive fossil energy projects

There is no such thing as an impact-free energy development project, renewable or not. However, to the extent that clean power projects reduce or eliminate local impacts while contributing to decarbonization, the growth of the U.S. renewable energy industry can create thousands of new jobs without destroying public health or the planet.

The clean power job creation argument began to gather steam during the Obama administration when critics of the sprawling Keystone XL tar sands oil pipeline pointed out that the project was expected to create just a handful of permanent jobs in the U.S. By the time President Biden took office, the project was all but dead.

In a parallel development, the state of Louisiana has emerged as a test case for the clean energy transition. In 2013 the Louisiana Flood Protection Authority-East filed a lawsuit against dozens of oil, gas and pipeline companies, alleging their coastal infrastructure damaged protective natural barriers, exposing local communities to risks.

More recently, plans to expand a massive plastics complex in Louisiana’s notorious “Cancer Alley” were put on hold by a federal court, which cited both local public health impacts as well as climate impacts.

America’s Clean Power currently ranks Louisiana down at 48th place in wind, solar, and energy storage capacity compared to other U.S. states, but that is about to change.

Earlier this month, the U.S. Department of Commerce tapped Louisiana as one of its “Build Back Better Challenge” awardees for regional energy projects. The $50 million award will enable Louisiana to kickstart a green hydrogen hub in the New Orleans region, leveraging access to offshore wind resources in the Gulf of Mexico. 

The $50 million award is just the tip of the iceberg. The Biden administration estimates that the Inflation Reduction Act will pump another $5 billion of investment in utility-scale clean power and energy storage projects into the Louisiana economy by 2030, with a consequent impact on job creation.

With the total loss of the job creation argument, it’s little wonder that fossil energy stakeholders, and their allies among elected officials, have fallen back on the “woke capitalism” slur to gin up public resentment against renewable energy investors.

That may work in election-year politics, but there is no holding back the clean power tide. The impact of the Inflation Reduction Act will continue to ripple out long after President Biden completes his time in office.

Image credit: Los Muertos Crew/Pexels