Clean Energy Has Taken a Hit. Will It Rebound?

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Clean Energy Has Taken a Hit. Will It Rebound?
Stateline May19
Gen Nashimoto of Luminalt installs solar panels in Hayward, California, late last month. The pandemic has devastated the clean energy workforce, including solar installers, but experts say renewables still have a bright future.
Ben Margot/The Associated Press

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Late in April, Warren Leon convened a meeting of leaders from around the country who are overseeing their states’ transitions to clean energy. He feared the group — 14 states plus the District of Columbia that have committed to 100% clean power goals — would have had its ambitions set back by the ongoing pandemic.

“I thought some states might say, ‘Everything’s on hold; we can’t really focus on that,’” said Leon, who directs the newly formed 100% Clean Energy Collaborative, a group of state officials sharing information and strategies about renewable and carbon-free electricity. “That didn't happen. All the states were enthusiastically engaged on the issue and wanting to move forward as fast as possible.”

That optimism was a surprise, given the battering the clean energy industry has taken over the past two months. The pandemic has slashed state budgets, devastated the clean energy workforce and set back many projects. State restrictions have kept many workers at home, especially in fields such as solar installation and energy efficiency that can require home visits.

Some companies have struggled to finalize permits or investments for major projects, with uncertainty looming over both government and the private sector. There also are questions about how the pandemic may reshape the industry.

Energy usage patterns have shifted radically during lockdowns, and lingering changes such as telecommuting may require new strategies to meet altered demands. Meanwhile, disruptions to overseas supply chains have some observers wondering whether domestic manufacturing will need to scale up in the future.

But leaders from California to New York to Washington say the disruption is just a speed bump. In the states that have set firm clean energy targets, utilities, investors and developers have been preparing to meet the demand created by state mandates, and that work isn’t stopping.

“There's no slowing down, and there’s no backing off,” said Doreen Harris, director of large-scale renewables at the New York State Energy Research and Development Authority. “If anything, the commitment has only been redoubled.”

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Still, the path ahead remains unclear, even if the destination isn’t. Some clean energy advocates are frustrated that the Trump administration is pushing to bail out oil companies, while ignoring pleas to help the renewable sector. Talks of future stimulus plans are politically fraught, and it’s unclear how long it will take for businesses and the workforce to get back to full strength as stay-at-home restrictions are lifted.

Better Days Ahead

The pandemic has created immense near-term challenges for the renewable energy industry, which had been growing at a rapid pace before the economy ground to a halt. In New York, Harris said, the clean energy industry was growing twice as fast as the economy as a whole.

In the past two months, the industry has lost nearly 600,000 jobs — a 17% employment loss — according to analysis conducted by BW Research. The firm projects that those numbers could soon reach 850,000, or a quarter of the sector’s workforce.

The largest clean energy sector, energy efficiency, has lost more than 400,000 jobs, as financial uncertainties and social distancing guidelines have stalled investments to retrofit buildings and homes. Residential solar installations have nosedived for similar reasons, and some larger projects have been put on hold because of permitting or financing delays.

Meanwhile, delays mean less renewable electricity will be added to the grid in 2020. Projections for new wind and solar capacity have dipped by 26%, according to Bloomberg New Energy Finance. The U.S. Energy Information Administration, which arrived at a much higher capacity number, still forecasts a 7% drop from earlier estimates.

Bloomberg’s revised projection — 17 gigawatts of new wind and solar — is “still a very credible, strong year,” according to Gregory Wetstone, president and CEO of the American Council on Renewable Energy. And the fallout from the pandemic isn’t likely to be a long-term threat to the industry, or to states’ plans to clean up their grids, experts say.

“The demand is still there,” Wetstone said. “The fundamental underlying health of the renewable sector is very strong, and the pieces are in place to continue to drive growth when people can get out and work.”

Many state officials think investments in clean energy could play a huge part in the country’s economic recovery. They point to the 2009 stimulus package passed during the last recession, which provided $90 billion for the industry. That investment paved the way for the rapidly growing, increasingly affordable renewable energy being provided today, several state officials said.

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“When states have to go it alone, it’s much harder.”

The law did have misfires, including an expensive carbon capture project that never panned out, and a much-criticized loan default from solar company Solyndra. Advocates say future stimulus funds need to have an increased focus on equity, advancing clean energy while benefiting low-income and marginalized communities.  

“[Recovery Act] projects continue to support our state in its transformation to the clean energy economy of the future,” wrote Lisa Brown, director of the Washington State Department of Commerce, in a letter late last month to the state’s congressional delegation asking for federal money.

Brown pushed for a $25 billion nationwide plan that would back state efforts to strengthen energy infrastructure, weatherize houses, provide loans for clean energy projects, retrofit public facilities, train workers, and provide grants for energy efficiency and conservation.  

The NW Energy Coalition, an alliance of energy groups that operate in the Pacific Northwest, also is working on a stimulus proposal. High on its list is a federal program that would help low-income families pay their energy bills, make their homes more energy-efficient or install solar panels — all of which would require a lot of workers.

On Target

Whether or not the federal government makes clean energy a priority, states say they’re confident they will still meet their goals. Rhode Island, for instance, aims to get all of its energy from renewable sources by 2030, while other states have targets as far off as 2050. 

“I’m not worried about our ability to get to our renewable energy targets, because it’s set in stone that we have to do it,” said David Hochschild, chair of the California Energy Commission. The state has pledged to reach 100% carbon-free energy by 2045. “We’re in a pretty healthy space looking long term.”

But he said the pandemic has caused significant disruptions.

“This is a big storm. It's not something we're going to bounce back from immediately.”

Public officials across the country told Stateline that the pandemic has not impeded their long-term goals to increase renewable energy.

New Jersey is still bullish about its plan to build massive offshore wind capacity, while utilities in the Pacific Northwest are proceeding with plans to procure more than 4.5 gigawatts of new electricity — with renewables expected to lead the charge. And Hawaii this month announced 16 new solar and energy storage projects.

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Even in states without a clean energy mandate, the transition is continuing. Michigan’s two largest utilities had previously agreed to meet increased renewable targets as part of a deal with billionaire climate advocate and former Democratic presidential candidate Tom Steyer.

Michigan’s aging infrastructure, particularly coal plants at the end of their lifespan, is forcing companies to work quickly toward that goal, said Sally Talberg, who chairs the Michigan Public Service Commission.

“We see a continued sense of urgency to work to ensure our power supplies are transitioning,” she said. “We don't see this pandemic detracting from that need.”

Hurdles Ahead

Despite the long-term optimism, leaders acknowledge that the industry won’t recover overnight. It’s unclear when construction will restart in many states. Some investors may wait for more stable economic conditions.

Families suffering from economic hardship aren’t likely to buy rooftop solar panels or make efficiency upgrades — let alone invite a stranger to their home in the middle of a pandemic.

Meanwhile, state and local officials working from home may be delayed in processing permits, and disrupted overseas supply chains could place crucial parts in short supply. 

“It's not clear yet how we're going to get back to a world where it's easy to, for instance, put solar on your rooftop,” said Wetstone of the American Council on Renewable Energy. “And those big wind turbines have on the order of 8,000 parts, with a supply chain network that comes from a lot of different places.”

However, he noted that most large clean energy projects are built in rural areas where social distancing is easy to maintain. Several states have clarified or adjusted stay-at-home orders to allow clean energy construction. 

Public health guidelines do remain an obstacle in some places. The Energy Trust of Oregon, which also operates in Southwest Washington, has seen its energy efficiency and solar installations hampered by Washington’s construction restrictions. 

“That’s had a pretty big hit,” said Hannah Cruz, the organization’s senior communications manager. “We’ve seen a drop-off in the number of permits submitted.”

Brian Young, the lead clean technology adviser to Washington Gov. Jay Inslee, a Democrat, said some of the state’s largest residential solar installers have furloughed all of their employees. Meanwhile, many projects that were on the cusp of finalizing permits or locking in financing are “all up in the air.”

But Washington’s clean energy mandate — 100% zero-emissions electricity by 2045 — should give developers and investors confidence.

“Our policies are going to help allay those concerns in this state,” he said. “It gives our state some certainty that no matter how bad it gets, by law those projects are going to have to move forward.”

And it’s unclear what local economies will look like after the pandemic. Washington, D.C., for instance, had focused much of its clean energy plan on reducing energy consumption at large office buildings. The District has a population of roughly 700,000, but before the pandemic an additional 500,000 commuters headed into town each weekday.

With most of those employees now working remotely, D.C. has seen a 20% drop in energy usage by office buildings, and many workers likely will continue to telecommute after the pandemic ends.

“Almost everything has to be recalibrated right now, but the goal remains the same,” said Tommy Wells, director of the city’s Department of Energy and Environment, which is overseeing D.C.’s switch to renewable energy by 2032. “I think we can get there.”

Some leaders see promise. The decline of the oil industry, which has been devastated by the economic lockdown, could further accelerate the switch to renewables.

“If I were a worker in clean energy who's been laid off or a worker in the oil industry who's been laid off, I'd be more optimistic that my job was coming back if I was in clean energy,” said Leon, who directs the multistate energy collaborative.

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