Advanced Energy Perspectives

At 3.6 Million Jobs in 2019, Advanced Energy Was Growing. Then the Pandemic Hit.

Posted by Bob Keough

Apr 22, 2020 5:04:55 PM

   

2020 jobs industry-500

Since 2016, the year when authoritative data first became available, we have been reporting the size and growth of employment in advanced energy on an annual basis. During that time, we have seen U.S. advanced energy jobs grow from 2.7 million in 2015 to 3.6 million in 2019. Each year the growth in advanced energy employment has outpaced growth in U.S. jobs overall, often by a factor of two or more. So it is with the latest numbers. But this is not like any other year. Rather, the job growth of last year is now overshadowed by the immediate job losses resulting from the coronavirus pandemic. Now the critical jobs need is sustaining the industry during the lockdown – and making good on the employer expectations of growth coming into 2020 by driving the economic recovery to follow.

The latest advanced energy job numbers come, as always, from BW Research Partnership, from the dataset assembled for the annual U.S. Energy and Employment Report, published by Energy Futures Initiative in association with the National Association of State Energy Officials. Also as always, AEE has put together the highlights in a handy fact sheet. But there is more to the numbers than can fit in a two-page fact sheet – and this year, perhaps, more to explain.

First, the good news: As of the third quarter of 2019, the advanced energy industry employed 3.6 million U.S. workers. Like the year before, advanced energy employment exceeded that of retail stores (3 million), was more than double employment in hotels and motels (1.7 million), per the Bureau of Labor Statistics, and more than triple the jobs in coal and oil (1 million combined), per the U.S. Energy and Employment Report. Advanced energy added 77,000 jobs in 2019, for growth of 2.2%, compared with 1.2% for all U.S. jobs. Looking ahead to 2020, employers said they expected to add 5% to their workforce in the coming year.

Additional highlights:

  • Energy Efficiency continues to be the largest source of advanced energy jobs, at 2.4 million employed in 2019, up 2.3% from 2018.
  • The biggest job growth came in Advanced Grid and Storage technologies – 6.3%. The bulk of that growth came in Energy Storage, up more than 5,000 jobs, reaching nearly 80,000 total.
  • Advanced Electricity Generation jobs grew 2.8%, with increases in solar (after two years of decline) and wind employment, to 345,000 and 114,000 jobs, respectively.
  • In a down year for auto sales overall, employment in Advanced Vehicles fell 2.3% in 2019, to 266,000, following 15% growth the year before.

But this was as of Q3 2019. As the end of Q1 2020, things look very different.

As also reported by BW Research, advanced energy lost over 100,000 jobs in March, a drop of 3%, eclipsing all the job growth in 2019, due to the COVID-19 disruption. The full extent of the jobs impact was even worse: Including temporary unemployment and underemployment, jobs affected come to nearly 400,000. With unemployment claims mounting, it was projected that advanced energy had lost or would lose more than half a million jobs, or 15% of total employment, without action to support the industry.

In an open letter to Congress and the White House and in a follow-up fact sheet, AEE has highlighted the impact of the coronavirus pandemic and response on advanced energy businesses and workers. But AEE has also made the case that there is a simple, no-cost measure Congress could take to mitigate this impact, and then put the advanced energy industry in a position to drive the economic recovery to follow: allowing direct payment, instead of tax credits, for advanced energy development.

As explained in the fact sheet, under current law, installations of solar, wind, battery storage, fuel cells, and other advanced energy technologies receive support in the form of federal tax credits, which are used to finance development. In the current economic situation, the few banks that control the tax equity market have essentially stopped awarding companies these tax credits. As a result, anticipated projects get placed on hold or even canceled, jobs are lost, and companies face a major risk of closure, while consumers and businesses pay more for energy. In a recent survey of our members, as reported in the fact sheet, 60% of advanced energy companies said that a change of federal tax credits to 100% direct pay would help their business. 

Direct pay will not relieve all the COVID-19 disruption on advanced energy businesses. But it will immediately reduce uncertainty, increase liquidity, and ensure a speedy recovery for advanced energy developers at a crucial time. It is a no-cost action that is worth taking, for the relief it will provide today and for the return to vigorous economic growth tomorrow. 

When it comes to that return to growth, the United States is going to need advanced energy as an economic driver. Look at the track record, pre-COVID-19: Advanced energy is a $238 billion U.S. industry, roughly equal in revenue to aerospace manufacturing and double that of biotechnology. From 2011 to 2018, U.S. advanced energy revenue grew at a compound rate of 6% per year, regularly outpacing U.S. GDP. In 2018, advanced energy revenue was up 11%, nearly four times the rate of the U.S. economy overall.

As our leaders in Congress look toward stimulus to jumpstart the U.S. economy coming out of the public health crisis, investment in advanced energy is where they should be looking.

Download 2020 Employment Fact Sheet

Topics: Federal Policy Update, Advanced Energy Employment

About

Advanced Energy Perspectives is AEE's blog presenting news, analysis, and commentary on creating an advanced energy economy. Join the conversation!

Subscribe to Email Updates

Recent Posts