The Dirty Little Secret Behind Clean Energy Jobs
Renewable energy advocacy groups like Clean Energy Economy Minnesota (CEEM) often claim that “clean” energy is a major jobs engine for our state. In fact, CEEM released a report, which is largely just a summary of another report, claiming a whopping 61,000 people work in the clean energy industry but there is a major problem with these numbers: they aren’t what most people would consider “clean energy” jobs.
When you think of “clean energy” jobs, what kind of jobs do you visualize? Most people probably think of someone installing a solar panel or a wind turbine, but 46,191 (approximately 76 percent) of the jobs counted as “clean energy” jobs in the CEEM report are jobs in the heating, ventilation and air conditioning industry, and people who build and install energy-efficient doors, windows, appliances and lighting.
The wind and solar industries employed just 7,140 Minnesotans in 2018, or about 12 percent of the total “clean energy” jobs in the report. However, it is important to note that most of the jobs in the wind and solar industries are temporary construction jobs.
In Minnesota, it is reasonable to assume that as many as 81 percent of the jobs in the wind and solar industries were temporary construction jobs, because no conventional power plants were built last year. This would mean just 2.2 percent of 61,000 “clean energy” jobs in Minnesota were non-temporary construction jobs in the wind and solar industries in 2018. Hardly a jobs panacea.
While renewable energy advocates are quick to take credit for jobs that have little to do with wind or solar, they ignore the fact that rising electricity prices, caused by mandating intermittent, and expensive sources of electricity on the grid, results in significant job losses.
Center of the American Experiment recently released a report which used the economic modeling software IMPLAN, which is considered the industry standard for economic modeling software, to determine that 20,950 jobs would be destroyed by higher electricity prices if Minnesota were to pursue a 50 percent renewable energy mandate.
These jobs losses would be most pronounced in energy intensive industries like manufacturing and mining, where electricity costs are highest. In fact, a 50 percent renewable energy mandate would cause electricity prices to increase by 40 percent, which would increases costs for Minnesota iron mines and paper mills by nearly $200 million each year. This is the equivalent of 2,490 high-paying mining jobs with annual wages of $80,000, which is nearly twice the annual average wages paid in St. Louis County.
If new jobs create new wealth by providing goods and services more efficiently than before, then everyone prospers. The problem here is that wind and solar are not creating more output for less input, they are using more capital to produce less electricity than their conventional counterparts. This is not called economic growth, it is called inefficiency, and this is a bad thing.
When Minnesota lawmakers mandate and subsidize renewable energy, they are not creating value for consumers; they are simply funneling money into the energy sector that would have otherwise been spent elsewhere.
This jobs report will likely draw favorable media coverage, but a deeper look at the numbers exposes the fact that these numbers are artificially inflated by including workers who are only tangentially related to energy efficiency, and 2.2 percent of the wind and solar jobs are non-temporary construction jobs.
Isaac Orr is a policy fellow specializing in energy and environmental policy at Center of the American Experiment.