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Jobs? Investing in Renewables Beats Fossil Fuels

For policymakers who are interested in job creation, investing in renewable energy is considerably more effective than investing in fossil fuels, writes Allan Hoffman, author of the blog Thoughts of a Lapsed Physicist and formerly with the U.S. Department of Energy. Solar and wind are powerful engines of job creation and economic growth.

Job creation is always a safe issue for politicians to address and it played a crucial role in our recent presidential election. Donald Trump achieved his unexpected upset victory over Hillary Clinton by appealing to disaffected workers in normally Democrat-leaning states such as Pennsylvania and Wisconsin. A primary focus of the Trump campaign was jobs in the manufacturing and coal-mining industries, where many workers had been laid off in recent years. Some people have blamed these job losses on Obama Administration policies, including support for solar and wind energy. What are the facts?

The fact that renewable energy, mostly in the form of solar and wind energy, is entering the energy mainstream, both in the U.S. and in other countries,  is a reality. This is often attributed to their reduced costs and role in reducing carbon emissions. What is often overlooked or given minimal attention is that investment in the manufacture and deployment of these clean energy technologies creates many ‘green jobs’. What data supports this statement?

Already the largest source of renewable energy jobs in the U.S., solar energy will be a major factor in shaping our future energy system and creating new jobs

Data for the U.S. was available from the Green Jobs Initiative of the Bureau of Labor Statistics in annual reports for fiscal years 2009, 2010, and 2011. Unfortunately, budget sequestration brought an end to this program in 2013. Today other organizations are filling the gap, e.g. The Solar Foundation’s annual ‘National Solar Jobs Census’, monthly reports from the U.S. Energy Information Administration (EIA), and occasional reports from other non-governmental organizations.

Largest employer

On a global basis the International Energy Agency (IEA) has become a source of jobs information, as has the International Renewable Energy Agency (IRENA) through its Renewable Energy and Jobs Annual Reviews. Two highlights of IRENA’s 2016 Review were that (a) global direct and indirect employment in the renewable energy industry had reached 8.1 million in 2015, a 5% increase over 2014, and (b) solar photovoltaics (PV) was the largest renewable energy employer at 2.8 million jobs, an 11% increase over 2014.

Solar Foundation data indicated that in 2016 the U.S. solar industry (8,600 companies) employed 260,00 workers. This was an increase of  more than 20% for the fourth straight year and more than 178% since 2010. This outpaced the overall 2016 national jobs growth rate of 1.5%. California led U.S. states in solar employment with 100,050 jobs.

How do these numbers compare with numbers in the fossil fuel industries? In 2015 workers employed directly in oil and natural gas extraction numbered about 187,000, a decrease of 14,000 from 2014. Indirect related jobs number about 2 million, of which about 40% are at gas stations. Another fossil fuel industry that received considerable attention during the 2016 election was coal mining. It accounted for 68,000 jobs in 2015, continuing its decrease of recent years.

A different story

Looking ahead, what can we expect? As oil and natural gas prices increase from their recent lows, and fracking is therefore reinvigorated, the number of related extraction jobs should stay approximately level. This should continue as long as no cost penalty is imposed on carbon emissions, and Trump Administration support for maintaining and expanding fossil fuel extraction is strong.

Coal is a different story. Long the basis of more than half of U.S. electricity generation, coal’s share of that market is now down to about a third and heading lower. When combusted it is the dirtiest of the fossil fuels, and automation of the coal digging process and competition from fracked and low cost natural gas has signaled the beginning of the end of the coal era and related jobs in the U.S. In addition, utilities are not adding new coal powered systems because their capital and operating costs are higher than for new  natural gas, wind and solar power plants (data provided by EIA).

Solar and wind are no longer niche businesses

What are the prospects for renewable energy and related jobs in the U.S. in the future? As reported by the American Wind Energy Association (AWEA), at the start of 2016 jobs in the U.S. wind industry totaled 88,000, an increase of 20% over 2014. This was made possible by the installation of nearly 9,000 megawatts of new electrical generating capacity across 20 states, an increase of 77% over 2014. Wind accounted for 41% of all newly installed U.S. electrical capacity in 2015, ahead of solar (28.5%) and natural gas (28.1%).  This growth will continue both onshore, where essentially all U.S. wind turbines have been installed to date, and offshore as this large resource begins to be tapped.

Impressive prospects

Two recent reports have documented the equally impressive prospects for solar energy’s growth. IRENA’s ‘Letting In the Light: How Solar Photovoltaics Will Revolutionize the Electricity System’ states that “The age of solar energy has arrived. It came faster than anyone predicted and is ushering in a shift in energy ownership.”

Bloomberg New Energy Finance reported in a June 2016 report that “ and wind technologies will be the cheapest way to produce electricity in most parts of the world in the 2030s..” Already the largest source of renewable energy jobs in the U.S., solar energy will be a major factor in shaping our future energy system and creating new jobs. A recently published book Sun Towards High Noon: Solar Power Transforming Our Energy Future (Pan Stanford Publishing; Peter Varadi editor and contributor) discusses the jobs issue in detail along with other issues, including solar financing, markets, and quality control.

We must not be left behind as this energy transition unfolds in the next several decades

What conclusions can be drawn? If a primary national  goal is to create jobs in the energy sector, investing  in renewable energy is considerably more effective than investing in fossil fuels. Solar and wind are no longer niche businesses, their widespread use addresses global warming and climate change, and their manufacture and deployment are powerful engines of economic growth and job creation.

The U.S. Congress must recognize this and put policies in place that accelerate their growth. Other countries recognize this potential and are moving rapidly onto this path, some even faster than the U.S. We must not be left behind as this energy transition unfolds in the next several decades, but we must also not forget the people who will be  displaced from their jobs in traditional energy industries.

Editor’s Note

Allan Hoffman is author of the blog Thoughts of a Lapsed Physicist. He is a former Senior Analyst in the Office of Energy Efficiency and Renewable Energy at the U.S. Department of Energy (DOE) and physicist by training. 

Hoffman is a contributor to a new comprehensive handbook, Sun Towards High Noon, edited by solar pioneer Peter F. Varadi,  which details the meteoric expansion of the solar (PV) industry and describes how solar power will change our energy future.

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Content Discussion

Bob Meinetz's picture
Bob Meinetz on May 23, 2017

Allan, you lost me at

If a primary national goal is to create jobs in the energy sector, investing in renewable energy is considerably more effective than investing in fossil fuels.

It’s not a primary goal. The primary goal in the U.S. energy sector (there can only be one) is to reduce carbon emissions. Solar and wind have shown no efficacy at doing so, especially when they sacrifice zero-carbon, dispatchable nuclear.

Your assessment might only be excusable coming from the pen of a lapsed physicist.

Darius Bentvels's picture
Darius Bentvels on May 25, 2017

That seems far off the real primary goal of US energy sector.
Especially considering the new republican/Trump policy.

If solar and wind produce 80% of all KWh’s, then it’s clear that fossil produce only ~20%. Which implies huge reduction compared to present situation in USA.
Then we don’t consider storage, heat pumps, etc.

But if climate & renewable US researchers/scientists, entrepreneurs and engineers feel they no longer have good opportunities in USA, they are urgently invited by the new French president to come to France!
Just view his excellent appeal in good English with a light nice French accent.

Bob Meinetz's picture
Bob Meinetz on May 25, 2017

Bas, I’ve seen his appeal – it applies to nuclear professionals too, but nice try.

Whoever would be delusional enough to believe solar and wind will “produce 80% of all KWh’s”, likely believes money grows on trees, and the sun shines all night. And should seek professional help.

Jesper Antonsson's picture
Jesper Antonsson on May 26, 2017

If a primary national goal is to create jobs in the energy sector, investing in renewable energy is considerably more effective than investing in fossil fuels

This is economic illiteracy at its worst. For a certain constant output in a sector, we want as _few_ jobs as possible. More jobs means higher costs and less resources in other sectors, i.e. less wealth overall. In fact, the reason the western world is wealthy is that we have over a few centuries decreased the amount of needed labor for any given output, freeing people up to do more. If US schools can’t teach kids these basic facts, then that’s a clear danger to its society. Look at Venezuela for some insight on what happens when people have economy totally backwards.