Biden’s climate agenda has a problem: Not enough workers

Jan 11 (Reuters) – U.S. clean energy companies are offering better wages and benefits, bringing in trainers from abroad and considering ideas such as buying roofs and electrical repair shops just to hire their workers as companies try to overcome a labor shortage that threatens to derail President Joe Biden’s climate change agenda.

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

But with the U.S. unemployment rate at an all-time low of 3.5%, companies say they fear they will struggle to fill those jobs and plans to transition from fossil fuels could bog down. Despite announcements of layoffs and signs of a slowdown elsewhere in the economy, the labor market for clean energy jobs remains tight.

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

The shortage is expected to hit electric vehicle and battery production, as well as solar panel and home efficiency installations, particularly hard, forcing some companies to take bold new approaches to finding workers.

Korea-based SK Innovation Co Ltd, which makes batteries for Ford Motor Co’s (FN) F-150 Lightning all-electric pickup truck in Commerce, Georgia, has boosted wages and benefits by increasing its U.S. workforce by 4,000 to 20,000 people by 2025. today.

The battery maker advertises hourly wages of between $20 and $34, above the median hourly wage of $18.43 in Georgia, according to the U.S. Bureau of Labor Statistics. It also covers life insurance costs at 100% and matching pension plan contributions up to 6.5%, above the national average of 5.6%, according to the Plan Sponsor Council of America. And the company provides free food at work.

“Georgia’s talent pool isn’t exactly huge. But we’re 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 issue.

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

As domestic residential solar installer SunPower Corp (SPWR.O) recruits aggressively, chief executive Peter Faricy said the company is also considering what he called “crazy ideas” to secure the workforce. work, in particular by taking over companies solely for their workers.

“I’m not saying we’re going to do it, but I want to give you an order of magnitude of what we’re looking at. For example, should we buy a roofing company and make them all solar installers? Are we going to buy a electricity company? and acquire 100 electricians? he said.

SunPower also held talks over the past year with panel maker First Solar Inc about developing a solar panel that would be easier to install, allowing crews to power two homes per day instead of just one, Faricy said.

SunPower competitor Sunrun Inc (RUN.O) deploys drones to monitor rooftops before installation, reducing the number of workers needed to scale rooftops. It also rewards top crews with office parties.

“At best, you can play on 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 developer Orsted (ORSTED.CO), a Danish company that plans to build projects off the east coast, hopes to fly in project workers to the UK and Asia to help train staff. State reports have indicated that New York and Massachusetts are facing significant offshore wind labor shortages.

“We’re creating a kind of ecosystem where we don’t just have an offshore wind academy, but really train the trainers of the future,” Mads Nipper, CEO of Orsted, told Reuters.

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

But many of those jobs have lagged behind the fossil fuel industry, according to a 2021 study by BW Research, as clean energy companies have sought to contain costs to compete with established industries. The IRA seeks to address this issue by linking prevailing salary and apprenticeship requirements to grants.

These provisions — and hiring difficulties — have pressured some employers to use a unionized workforce.

Learning from its previous hiring difficulties in Europe and Asia, Orsted signed an agreement with building trades unions in North America to find workers.

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

Amazon did not respond to requests for comment.

Corrine 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 was excited about the job security offered by the growing demand for electricians to install charging stations.

“Our field is constantly evolving due to new energy sources and being part of it is amazing,” she said.

FREE WORKER TRAINING

In their hunt for workers, solar, wind and electric vehicle companies have expanded programs offering free and subsidized training to military veterans, women and formerly incarcerated.

SK told Reuters it recruits at military job fairs and American Legion chapters and works 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 recruit veterans, saying the skills learned in military life translate well into the industry.

Last year, large-scale solar developer SOLV Energy, SunPower and Nextracker partnered with nonprofit Solar Energy International to fund a women-only training program for solar installers. More than 30 women have taken the week-long course in Colorado.

In October, the nonprofit Solar Hands-On Instructional Network of Excellence (SHINE) partnered with the Virginia Department of Corrections in a pilot program to train 30 inmates and recently incarcerated people in the facility to solar panels. SHINE director David Peterson said the group was discussing expanding the program.

In California, the nonprofit Grid Alternatives has trained 150 Madera County Jail inmates on solar installation since 2017 and is expanding its program this year to other facilities across the state. Potential employers are more open to hiring formerly incarcerated people once they see they’ve received training, said Tom Esqueda, the association’s outreach manager.

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 into its funded jobs program. by the state. Homeboy trains 50 to 60 people per year as solar panel installers.

More than 80% of people who have taken the training in the past year have found jobs in solar, according to Jackie Harper, who oversees the program.

“I’m going to stick with it,” said Marco Reyes, 28, who completed the program after being released from prison in February and earns $23 an hour as an installer in Valencia, Calif.

He now plans to train at the electrical end of the solar installation, which would increase his salary.

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

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Reporting by Nichola Groom and Valerie Volcovici; Edited by Richard Valdmanis and Suzanne Goldenberg

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