The Effect of Alternative Energy Sources on the Unemployment Rate

-By Jennifer Runyon, November12, 2010 (Renewable Energy World)

New Hampshire, United States – The reports are so grim, it is hard to believe at times. America is staring down a 10% unemployment figure and the number doesn't seem to budge as the months tick by.


Analysts report that if you take into account the number of Americans that have stopped looking for employment as well as the number who have found only part-time work but seek full-time employment, the figure is more like 18%. In California, it's 22%, an unemployment percentage that hasn't been seen since the depression. In total, as many as 30 million people are looking for work right now.For years, the clean energy industry has claimed that it is the one bright spot in the U.S. economy. While other industries shrink and lose jobs, clean energy grows.

In looking at the data, it is clear that in all renewable energy technologies but one, in 2011 there will be significantly more jobs than there are now. The simple fact is that clean energy is indeed growing and creating jobs, but with U.S. unemployment figures so large, it’s just been hard to notice.

Solar Power

The solar power industry doubled the number of people that worked in the industry from 2009 to 2010, from approximately 50,000 in 2009 to 100,000 in 2010, according to the latest reports. In 2011, it is expected to grow the number of jobs in the industry by 26%. “You’d be hard pressed to find another industry with a 26 percent job growth rate for 2011,” said Rhone Resch, president of the Solar Energy Industries Association (SEIA).

The Solar Foundation released its National Solar Jobs Census 2010 at Solar Power International in October, showing that the solar industry is creating jobs at a much faster rate than the overall U.S. economy, which is expected to grow at around 2%. The report documents, through 2500 interviews with employers throughout the country, that over the next 12 months, more than half of U.S. solar firms expect to add jobs, while only 2% expect to cut workers. Firms are adding employees in all 50 states and the fastest growing jobs are installers and electricians.

Jobs for installers are growing because installations are growing at very high rates as well. SEIA along with GTM Research recently released a report that shows solar installations in 2010 are up more than 100% over 2009. The U.S. Solar Market Insight report compiled data for the first half of 2010 and shows significant growth in the U.S. solar industry.

It appears very likely that when accounting for both solar electric and solar thermal installations, the industry will surpass the 1 GW mark for annual installations in 2010. While 1 GW is a big number, Resch announced at SPI that the industry’s goal is to be installing ten times that number annually in 5 years. Resch said that installing 10 GW annually by 2015 would create as many as 220,000 jobs.

Geothermal Market: Strong 2011 Growth

For geothermal energy, the industry is expected to experience a strong rebound in 2011 thanks to the American Reinvestment and Recovery Act (ARRA), said Karl Gawell, Executive Director/ President of the Geothermal Energy Association (GEA).

“We are now projecting that they’ll be between 500 and 700 MW of new geothermal power projects in the drilling construction phase in the coming year,” said Gawell. He said that this final phase of geothermal development is the most difficult, expensive “and job intensive stage of development.”

Those projects will result in 3000 or more jobs added in the coming year, mostly in California and Nevada.

In late October, the GEA released its Green Jobs for Geothermal Energy Report, which examines jobs in the industry from project start to finish. The findings show almost 1000 different people are involved in a geothermal project. According to report, the development of geothermal power projects provides long-term income for a variety of skill-leveled employees. “This includes welders; mechanics; pipe fitters; plumbers; machinists; electricians; carpenters; construction and drilling equipment operators; surveyors; architects and designers; geologists; hydrologists; electrical, mechanical, and structural engineers; HVAC technicians; food processing specialists; aquaculture and horticulture specialists; managers; attorneys; regulatory and environmental consultants; accountants; computer technicians; resort managers; spa developers; researchers; and government employees.”

Since geothermal projects have long lead times, much of the money allotted to the industry from the ARRA will result in projects getting off the ground in 2011. According to the GEA, about 95% of the projects that received stimulus funding are either less than 50% complete or have yet to break ground. Gawell said that stimulus funding will be peaking in 2011 for the geothermal industry.

Looking Further Ahead: Bioenergy, and Hydro Jobs On the Rise. Wind, not so much.

In terms of bioenergy and biobased products, the U.S. is expected to lead the world in global development according to a report form the World Economic Forum released earlier this year. In the report, data provided by the Biotechnology Industry Organization (BIO), shows that as of June 2010, the biorefinery industry accounted for more than 40,000 jobs in the U.S. The commercialization of second and third generation biofuels is expected to create 800,000 new jobs (190,000 direct new green jobs, and 610,000 indirect new jobs) in the U.S. by 2022. Achieving the biorefining industry’s full potential could create tens of thousands more new jobs within the next five years, said the report.

In another report, “The Economic Impact of Advanced Biofuels Production,” which was released in February 2009, it was estimated that under the renewable fuels standard scenario the total number of jobs created through the production of second and third generation biofuels will be 29,000 by 2012. “Taking into consideration indirect job creation as a result of the economic stimulus created by biofuels development brings total job creation to 123,000 by 2012,” said the report. These short-term job growth number could be lower than the 29,000 and 123,000 projected due to the fact that the RFS was scaled back in February 2010, after this report was issued. Under the original ruling, it was required that 100 million gallons per year of cellulosic ethanol be on the market by 2010 but once it became clear that that was unachievable the number was reduced to 5 million gallons. The 2022 job growth numbers are solid however, as the overall number of gallons of cellulosic ethanol that will need to be produced by 2022 remained unchanged.

Jobs in this industry range from laborers and freight, stock and material movers; mixing and blending machine setters, operator and tenders; shipping and receiving clerks; chemical equipment operators and tenders; electrical and electronics repairers; sales representative, wholesale and manufacturing, technical and scientific products and many more.

Wind Power: Still Waiting

The wind power industry experienced a slowdown in 2010 for the first time in many years. With less access to the large amount of capital needed to build projects, the industry installed just 539 MW of capacity in the first quarter of 2010, the lowest number since 2007.

“The industry is stalled,” said Peter Kelley, Vice President, Public Affairs with the American Wind Energy Association (AWEA) who indicated that the wind power industry is waiting for policy that would help it grow. AWEA has been calling for a nation renewable energy standard for several years, believing that a strong signal from the U.S. government is what is needed to jump-start the industry.

In 2008, the industry employed 85,000 people, a number that has fallen in recent months as financing fell away.

Swift, short-term action to extend tax credits for renewable energy in 2009 helped boost the U.S. wind industry to historic job growth and a high of 10,010 MW in new capacity last year. With swift passage of a Renewable Electricity Standard, Denise Bode CEO of AWEA said the wind industry can get back on track and add new generation faster than any other source of electricity.

“This industry has proven a number of times that when you turn these policies on, we charge out of the gate,” said Steve Lockard, CEO of TPI Composites, a former boat-building company now manufacturing large wind turbine blades. “[The] U.S. wind energy has tens of thousands of workers and wind farm sites ready to go,” Lockard added. “It’s a good investment opportunity for Congress and the states, to create manufacturing jobs across the country.”

Hydro Power: Employing Millions in the Long Run

The renewable energy with the most capacity online in the U.S. is hydropower, which currently accounts for 7% of the electricity generated in the country. If you take into account an average of 2 to 3 full-time equivalent (FTE) workers per megawatt of installed capacity that are needed to operate, maintain and license compliance of the existing 100,000 MW of installed hydropower capacity, the U.S. hydropower industry currently accounts for approximately 200,000 – 300,000 of direct jobs.

A recent study conducted by Navigant Consulting and released earlier this year focused on just how many jobs could be created if hydropower was expanded under either a strong national RES (25% by 2025) or a weak RES (10% by 2025). The number of jobs that would be created is staggering. Under the strong RES scenario, it is estimated that 1,400,000 cumulative jobs across the country would be created by 2025, including 420,000 direct jobs, 280,000 indirect jobs and 700,000 induced jobs. Induced jobs account for the multiplier affect of direct and indirect jobs.

These numbers comes from taking advantage of the vast untapped potential of hydropower in the U.S., which has more than 400 GW of untapped hydropower resource potential inland and in its oceans.

Under a weak RES scenario, the number of cumulative jobs is expected to be 480,000 by 2025.

Jobs in hydropower come in all shapes and sizes. Project development activities result in jobs doing permitting, regulatory studies, licensing, design, and model testing. Hydropower also employs folks who perform component manufacturing, shoreline development, environmental instrumentation construction (such as fish bypass pieces), project construction, project commissioning, routine O&M, and minor and major equipment overhauls.

Clean Energy Creates Millions of Jobs

Admittedly, it’s difficult to tally these numbers in any comprehensive way to draw a clear picture of the total growth of the renewable energy job market for next year, in five years and in 15 years. Some industry estimates are projecting jobs in 2011, others look out as far as 2025. Just a rough summation of the above numbers shows that more than 2.5 million people, at least, will be either directly or indirectly employed in renewables by 2025. That would put about 8% of the 30,000,000 people looking for jobs right now back to work.