In the first 10 months of 2012, 46.22% of new electrical generating capacity brought online was from renewable energy. This year the average prices of renewable energy decreased across the board. The wind sector has seen a steep decline in the cost of operating and maintaining wind turbines—38% in the past four years. The solar industry has watched prices decrease sharply and as a result, solar installation is booming in America. A new report by GTM Research and SEIA shows 44% growth in solar installation during the third (3) quarter of this year compared to the third quarter of last year. All types of renewable energy are contributing in a significant way to America’s energy portfolio. However, with the looming fiscal cliff, it is important to realize that in order to continue growing key American industries that provide good jobs to Americans, key tax credits must be part of the fiscal solution.
Congress should recognize the momentum that renewable energy has achieved and do what it can to encourage further growth and job creation during fiscal cliff negotiations. Going forward, we need to manage our budget in a manner that drives domestic job growth and economic activity in the short term while reducing the deficit over the long term, investing in technologies that pay off as they deliver electricity from sustainable resources that are, in themselves, free.
While Congress weighs its options for the looming fiscal cliff, discussion about the clean energy industry and its future has been given a backseat—which I think is a mistake. I believe the economic progress and associated job growth of the renewable energy industry should be considered in the fiscal cliff debate and Congress should be aware of the cascading negative effects should the industry become a victim of government cuts. According to a study released by the Economic Policy Institute, 436,000 jobs will be lost in the clean-technology sector if America goes over the fiscal cliff, which is nearly equal to the amount of projected job losses due to defense cuts. There is consensus in the bipartisan research world that renewable energy generates“more jobs than the fossil fuel sector per unit of energy delivered.” Equally impressive, each dollar in clean energy investment creates 1.13 times as many jobs as average government expenditures.
As a country, we need to understand that if there are steep cuts to clean energy – whether they are in the form of a fiscal resolution or the result of jumping off the fiscal cliff – we will see substantial job losses all along the value chain and lose an opportunity to be the leading manufacturer of the highest quality clean-technology in the world. The loss of the Production Tax Credit (PTC), for example, would cause construction for new wind projects to plummet 75%—sending shock waves throughout America’s wind turbine component assembly lines—and 37,000 Americans out of the 85,000 Americans currently employed by the wind industry will lose their jobs.
If we saw clean energy investment on its true merits, instead of dismissing government investment in the industry as dispensable, we would understand that tax credits and investments in renewable energy contribute to a more robust, resilient economy and job growth. Clean energy is a job-creator and can be a solution to rather than a part of the fiscal problem. As we decide which programs to cut from our budget in an attempt to solve our economic woes, we should not end tax credits just to say we cut the deficit. Cutting key tax credits for renewable energy would leave tens of thousands of Americans out of work, only doing harm to our economy.