Business

Biden’s climate agenda has a problem: There aren’t enough workers


Jan 11 (Reuters) – U.S. clean energy companies are offering better wages and benefits, bringing in trainers from abroad and mulling ideas such as buying roofing and electrical services just to hire their workers, as firms try to overcome labor shortages hand that threatens to derail President Joe Biden’s Climate Change Agenda.

The Inflation Reduction Act signed last year provides about $370 billion in subsidies for solar, wind and electric vehicles, according to the White House. Starting January 1, American consumers can take advantage of these tax credits to upgrade their home heating systems or put solar panels on their roofs. These investments will create nearly 537,000 jobs annually over a decade, according to analysis by BW Research commissioned by The Nature Conservancy.

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But with the U.S. unemployment rate at a historic low of 3.5 percent, companies say they fear they will struggle to fill those jobs and that plans to transition away from fossil fuels may fail. Despite reports of layoffs and signs of a slowdown elsewhere in the economy, the labor market for clean energy jobs remains tight.

“I feel like a big risk for this expansion. Where are we going to find all the people?” said Abigail Ross Hopper, president of the Solar Energy Industries Association trade group.

Shortages are expected to hit electric vehicle and battery and solar panel and home efficiency industries particularly hard, forcing some companies to take bold new approaches to finding workers.

Korea’s SK Innovation Co Ltd, which makes batteries for Ford Motor Co (FN) The all-electric F-150 Lightning pickup in Commerce, Ga., has boosted wages and benefits as it grows its U.S. workforce to 20,000 by 2025 from 4,000 today.

The battery maker pays between $20 and $34 an hour to advertise, above the average hourly wage in Georgia of $18.43, according to the U.S. Bureau of Labor Statistics. It also covers 100% of life insurance costs and matching retirement plan contributions of up to 6.5%, above the national average of 5.6%, according to the Plan Sponsors Council of America. And the company provides free food during work.

“The talent pool in Georgia is not really huge. But we are trying to improve some of our policies to better find and retain workers,” said an SK official, who declined to be named, citing the sensitivity of the matter.

Georgia state officials said SK’s hiring was successful given how quickly production had to ramp up to meet the company’s obligations to automakers.

While national residential solar installer SunPower Corp (SPWR.O) is recruiting aggressively, CEO Peter Farisi said the company is also looking at what he called “crazy ideas” to secure labor — including buying companies just for their workers.

“I’m not suggesting we’re going to do that, but I want to give you the rundown of what we’re considering. For example, should we acquire a roofing company and do all solar installers? Should we buy an electric company and get 100 electricians?” he said.

SunPower has also held talks over the past year with panel maker First Solar Inc (FSLR.O) about developing a solar panel that would be easier to install, allowing crews to equip two homes a day instead of just one, Farisi said.

SunPower’s competitor, Sunrun Inc (RUN.O), uses drones to survey roofs before installation, reducing the number of workers needed to scale roofs. It also rewards top teams with office parties.

“Probably the best thing you can do is improve the employee experience … it just makes the industry more fun, more engaging,” Chris McClellan, Sunrun’s senior vice president of operations, said in an interview.

Offshore wind company Orsted (ORSTED.CO), a Danish company that plans to build projects along the East Coast, hopes to send employees from projects in the UK and Asia to help train staff. State reports show that New York and Massachusetts face large gaps in the offshore wind workforce.

“We are creating something of an ecosystem where we don’t just have an offshore wind academy, but we really train the trainers of the future,” Mads Nipper, Orsted’s chief executive, told Reuters.

The Biden administration has repeatedly promised that the new green energy jobs will be well-paying union jobs.

But many of those jobs are lagging in pay in the fossil fuel industry, according to a 2021 study by BW Research, as clean energy companies seek to curb costs to compete with established industries. The IRA seeks to address this by tying prevailing wage and apprenticeship requirements to grants.

These regulations — and hiring challenges — put pressure on some employers to use unionized labor.

Learning from its previous recruiting challenges in Europe and Asia, Orsted signed an agreement with North American construction unions to secure workers.

Even Amazon.com Inc (AMZN.O)a company embroiled in disputes with workers trying to organize has used union labor to build electric charging infrastructure for its fleet of electric delivery vehicles in Maspeth, Queens, New York.

Amazon did not respond to requests for comment.

Corinne Case, an electrician represented by the International Brotherhood of Electrical Workers, said she was paid $43 an hour to install the charging system at Amazon.

A single mother, Case said she is excited about the job security offered by the growing demand for electricians to install charging stations.

“Our field is constantly changing because of new energy sources and to be a part of that is amazing,” she said.

FREE WORKER TRAINING

In search of workers, solar, wind and electric vehicle companies have expanded programs offering free and subsidized training to military veterans, women and ex-prisoners.

SK told Reuters it has recruited at military fairs and American Legion branches and collaborated with programs such as the Georgia National Guard’s Work for Warriors and the Manufacturing Institute’s Heroes MAKE America.

Some solar companies have tried to hire veterans, saying the skills learned in military life translate well to industry.

Solar developer SOLV Energy, SunPower and Nextracker last year teamed up with nonprofit Solar Energy International to fund a women-only training program for solar installers. More than 30 women attended the one-week course in Colorado.

In October, the nonprofit Solar Hands-On Instructional Network of Excellence (SHINE) teamed up with the Virginia Department of Corrections on a pilot program to train 30 inmates and recently incarcerated people to install solar panels. SHINE Director David Peterson said the group is discussing expanding the program.

In California, the nonprofit Grid Alternatives has trained 150 inmates at the Madera County Jail on solar installations since 2017 and is expanding its program this year to other facilities in the state. Potential employers are more open to hiring ex-prisoners after they see they’ve received some training, said Tom Esqueda, manager of the nonprofit.

In Los Angeles, the nonprofit Homeboy Industries, which works to rehabilitate ex-gang members, is using potential job opportunities for solar panel installers to help recruits for its state-funded job program. Homeboy trains 50-60 people a year to be solar panel installers.

More than 80 percent of people who have gone through the training in the past year have found jobs in solar energy, according to Jackie Harper, who runs the program.

“I’m going to stick with it,” said Marco Reyes, 28, who went through the program after his release from prison in February and earns $23 an hour as an assemblyman in Valencia, California.

Now he plans to train in the electrical side of solar installations, which will increase his pay.

“Everyone has a chance to move up the ladder to a better position,” he said. “This job is life-changing for me.”

Read more:

Korea’s Hanwha Qcells to invest $2.5 billion in US solar energy supply chain

US solar installations to drop 23% this year due to China goods ban – report

Report by Nikola Groom and Valeri Volkovichi; Edited by Richard Valdmanis and Suzanne Goldenberg

Our standards: Thomson Reuters Trust Principles.


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