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

Jan 11 (Reuters) – U.S. clean energy companies are offering better wages and benefits, flying in trainers from abroad, and considering ideas such as buying roofers and electrical repair shops to hire only their own workers as the companies try to overcome a labor shortage that threatens to derail it. President Joe Biden’s Climate Change Agenda.

The Inflation Reduction Act, signed into law last year, provides for an estimated $370 billion in subsidies for solar, wind and electric vehicles, according to the White House. Starting January 1, American consumers can take advantage of these tax credits to upgrade their home heating systems or put solar panels on their roofs. These investments will create approximately 537,000 jobs annually for ten years, according to it Analysis by BW Research Commissioned by The Nature Conservancy.

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But with the US unemployment rate at a historic low of 3.5%, companies say they fear they will struggle to fill those jobs, and that plans to transition away from fossil fuels could be stalled. Despite layoffs and signs of a slowdown elsewhere in the economy, the job market for clean energy jobs remains tight.

“It seems like a big risk for this expansion. Where are we going to find all the people?” said Abigail Ross-Hooper, chair of the Solar Industries Association trade group.

Shortages are expected to hit particularly hard at the production of electric cars, batteries, solar panels and home efficiency fixtures, forcing some companies to take bold new approaches to finding workers.

The Korean company SK Innovation Co Ltd, which makes batteries for Ford Motor Co (FN) The all-electric F-150 Lightning pickup in Commerce, Georgia, has pumped up its pay and benefits package as it grows its U.S. workforce to 20,000 people by 2025 from 4,000 today.

The battery manufacturer advertises wages between $20 and $34 per hour, which is higher than the average hourly wage in Georgia of $18.43, according to the US Bureau of Labor Statistics. It also covers life insurance costs at 100% and retirement plan matching contributions up to 6.5%, above the national average of 5.6%, according to the Plan Sponsor Council of America. The company provides free food on the job.

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“The talent pool in Georgia is not really huge. But we are trying to improve some of our policies for better sourcing and retention of workers,” said an SK official, who asked not to be named, citing the sensitivity of the matter.

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

While the national residential solar installer SunPower Corp (SPWR.O) CEO Peter Varese said the company is also looking at what he called “crazy ideas” for securing employment – including companies buying out just their workers.

“I’m not suggesting we’re going to do it, but I want to give you an order of magnitude of what we’re thinking about. Like, should we acquire a roofing company and make it all solar installers? Do we go buy an electric company and acquire 100 electricians?” he said.

SunPower has also been in talks over the past year with panel manufacturer First Solar Inc (FSLR.O) about developing a solar panel that would be easier to install, and enabling the crew to outfit two homes a day instead of just one, Varese said.

SunPower’s competitor, Sunrun Inc (RUN.O), deploys drones to survey roofs prior to installation, reducing the number of workers required to scale roofs. It also rewards the best office party crews.

“The best thing you can play with is the employee experience… It makes the industry more fun and 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, is hoping to fly in staff from projects in the UK and Asia to help train staff. State reports indicated that New York and Massachusetts face significant offshore wind workforce gaps.

“We’re creating a kind of ecosystem where we not only have an offshore wind academy, but we actually train the trainers of the future,” Ørsted CEO Mads Nipper told Reuters.

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

But many of those jobs have lagged the fossil fuel industry in wages, 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 by linking prevailing wages and apprenticeship requirements to subsidies.

These provisions – and staffing challenges – pressured some employers to use unionized labour.

Learning from previous recruitment challenges in Europe and Asia, Orsted signed an agreement with construction workers unions in North America to secure workers.

Even Amazon.com Inc (AMZN.O)Inc., a company that was embroiled in disputes with workers trying to organize, used labor unions to build electric charging infrastructure for its fleet of electric delivery vehicles in Maspeth, Queens, New York.

Amazon did not respond to requests for comment.

Corinne Case, an electrician who is represented by the International Brotherhood of Electricians, said she received $43 an hour to install Amazon’s charging system.

Case, a single mother, said she is excited about the job security offered by the growing demand for electricians to install charging stations.

“Our field is constantly changing due to new energy sources and it’s amazing to be a part of that,” she said.

Free training for employees

In search of workers, solar, wind and electric car companies have expanded programs offering free and subsidized training to veterans, women and ex-prisoners.

SK told Reuters it recruits at military job fairs and American Legion chapters and partners with programs such as the Georgia National Guard’s Veterans Action and the Heroes MAKE America manufacturing institute.

Some solar companies have tried to recruit veterans, saying that skills learned in military life translate well to the industry.

Utility-scale solar developer SOLV Energy, SunPower and Nextracker last year teamed up with nonprofit Solar Energy International to fund a women-only training program for solar installers. More than 30 women attended the week-long course in Colorado.

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In October, the nonprofit SHINE Education Excellence Network teamed up with the Virginia Department of Corrections on a pilot program to train 30 prison inmates and recently incarcerated people to install solar panels. Shine director David Peterson said the group is discussing expanding the program.

In California, the nonprofit Grid Alternatives has trained 150 inmates at the Madera County jail in a solar installation since 2017 and is expanding its program this year to other facilities in the state. Tom Esceda, the nonprofit’s director of outreach, said potential employers are more open to hiring ex-prisoners once they see they’ve had some training.

In Los Angeles, the nonprofit Homeboy Industries, which works to rehabilitate former gang members, is using potential job openings for solar panel installers to help recruits with its state-funded jobs program. Homeboy trains 50-60 people a year to install solar panels.

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

“I’m going to stick to this,” said Marco Reyes, 28, who ran the program after his release from prison in February, earning $23 an hour as a fitter in Valencia, Calif.

He is now planning to train in the field of electric power for solar installation, which will increase his salary.

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

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(Reporting by Nikola Groom and Valerie Volkovici) Edited by Richard Waldmanis and Susan Goldenberg

Our standards: Thomson Reuters Trust Principles.

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