Renewable energy costs more jobs than it creates

“Solar jobs on the rise in Minnesota” according to a report by MPR News.

The [Solar Foundation’s] 2017 census shows that solar employment declined 3.8 percent nationwide, from 260,077 jobs in 2016 to 250,271 in 2017. But solar jobs increased in 29 states and the District of Columbia, including Florida, Minnesota, Utah, North Carolina, Pennsylvania and Georgia.

Minnesota added 1,384 new jobs from 2016 to 2017, the second highest state, and an increase of nearly 48% in solar job growth.

Recently, lobby group Clean Energy Economy Minnesota released a study which found that

As wind and solar energy have grown, they’ve created a tide of jobs nationwide in fields from construction to manufacturing. Renewable energy jobs, most of which are in wind and solar, grew by 16 percent to around 6,200 in Minnesota from 2015 to 2016, according to a recent study by Clean Energy Economy Minnesota, an industry-led nonprofit.

This all sounds wonderful, doesn’t it? What could be wrong with all these new jobs? Well, what all about all the jobs that were scarified to generate these ones?

After all, these new jobs in renewable energy come at the cost of higher energy prices for Minnesota’s consumers. If they had that extra money to spend on other things, they would generate new jobs elsewhere. When we consider the benefits of renewable energy in terms of jobs, we also have to consider the costs in terms of the jobs lost to generate them.

This is very difficult. We can count the jobs in renewables, but how do we count the jobs that never came into being to pay for renewables?

Fortunately, economic modeling can help us to quantify this. In our recent report Energy Policy in Minnesota: The High Cost of Failure, we reported that data from the U.S. Energy Information Administration showed that in 2007 Minnesota’s energy prices were 18.5% lower than national prices. By 2016, this was down to 2.5%. If, in 2016, Minnesota’s electricty prices had still been 18.5% lower than national prices, we estimated that Minnesotan consumers would have had an extra $1 billion in their pockets.

Using data from the American Coalition for Clean Coal Electricity we can apportion this to different household income groups. This allows us to use IMPLAN economic modeling software to estimate the effects if Minnesotan consumers had had this extra money to spend.

Doing this, we find that if Minnesota’s households had had this extra money, their spending would have generated 8,700 jobs. So, while the 6,200 jobs in renewables can be set on the benefit side of the ledger, the 8,700 jobs lost elsewhere have to be set on the cost side.

John Phelan is an economist at Center of the American Experiment.