Jobs in the Renewable Energy Sector to Explode Under Obama
In his weekly address on Saturday, January 24th, President Barack Obama promoted what he calls an American Recovery and Reinvestment Plan to immediately jumpstart job creation as well as long-term economic growth. According to Obama, the plan that will save or create three to four million jobs over the next few years. The President says his plan “will invest in our most important priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century.”
The rejuvenation of the economy and the creation of clean technology jobs dovetail with one another, according to Energy Central. The group says that “with billions about to be doled out for those purposes, energy-related interest groups are converging on Washington.” Already, the global market for environmental products and services is projected to double to more than $2.7 billion a year by 2020, according to Voice of America News, citing a recent study conducted by the International Labor Organization, the U.N. Environment Program and the International Organization of Employers. The study finds that renewable energy now generates more jobs than employment in fossil fuels. In fact, 2.3 million people have found new jobs in the renewable energy sector alone in recent years… and by 2030 nearly 8.5 million people will be working in wind and solar power.
Executive search firm, A.E. Feldman, says investment professionals with expertise in energy and alternative technologies will be poised to benefit from mounting demand. The firm reports that across the country, the wealth of individuals and institutional investors getting involved in the energy and clean technology sector is growing. A number of law firms with close ties to the VC community and strong IP practices have also jumped onto the green energy bandwagon. The firm notes that legal jobs may open up as firms build practice groups that target the clean tech sector.
Clean Energy Economy
Obama plans to aggressively accelerate the creation of a clean energy economy. The legislation, formally titled the American Recovery and Reinvestment Act of 2009, has moved through the three key committees in the House of Representatives: the Ways and Means, Energy and Commerce, and Appropriations committees. Now, as it progresses toward the House floor, the bill retains critical elements outlined in earlier updates, including: a 3-year production tax credit extension; the new DOE grant program to help monetize renewable credits for 2009 and 2010; a new $8 billion renewable loan guarantee program; an additional year of bonus depreciation for 2009; elimination of the cost caps for the small wind tax credit; and targeted provisions to encourage renewable transmission. Once on the House floor, the bill is expected to pass by a substantial margin.
Obama states, “We will double our capacity to generate alternative sources of energy like wind, solar, and biofuels over the next three years.” Obama’s plan also features a new electricity grid with more than 3,000 miles of transmission lines to convey this new energy across the U.S. Obama says the plan will save taxpayers $2 billion a year by making 75% of federal buildings more energy efficient, and save the average working family $350 on their energy bills by weatherizing 2.5 million homes. President Obama is optimistic that he will sign his plan into law in less than a month.
“We will put Americans to work in new jobs that pay well and can’t be outsourced - jobs building solar panels and wind turbines; constructing fuel- efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain,” Obama said in a speech at George Mason University in Fairfax, Va., according to Dow Jones. The report quotes Dan Weiss, Director of Climate Strategy at the Center for American Progress, as saying that Obama may be able to encourage the growth of new turbine manufacturing plants, particularly if Congress is able to pass a renewable energy portfolio, which would require an increasing percentage of power generation from sources such as wind and solar.
Politicians Jumping on the “Green Bandwagon”
At a recent renewable energy forum, Senator Harry Reid, (D-Nev.), said Congress is poised to take “giant leaps forward” to build a green economy after having taken “baby steps” in recent years, according to the Law Vegas Review-Journal. The report quotes Reid as saying, “We need to move to renewable energy big time. We have a great opportunity to abandon the baby steps of the past and embrace the giant leaps forward we’ll need in order to make sustained and long-term progress. For all of us who believe that a focus on clean energy can lead to a new era of sustainable economic growth, this is an exciting time.”
In its last session Congress passed a bill to increase the fuel efficiency of cars and promote energy-saving light bulbs, office buildings and home appliances. Later in the year, it also extended tax credits for solar, wind, geothermal and other clean power sources.
Moreover, in a recent statement, California Governor, Arnold Schwarzenegger ordered a faster push for renewable energy. According to the Governor’s office, Schwarzenegger signed an executive order to increase the state’s Renewable Energy Standard, calling on utilities to provide 33% (up from 20%) of their power from renewable resources by 2020.
“I am proposing we set the most aggressive target in the nation for renewable energy, 33%, by the year 2020-that’s a third of our energy from sources like solar, wind and geothermal,” Schwarzenegger said. The Governor added, “This executive order will clear the red tape for renewable projects…California has a bright energy future ahead that will help us fight climate change while driving our state’s green economy.”
The Western Governor’s Association, a non-partisan group representing the Governors of 19 states, also penned a letter to President Obama arguing that energy efficiency and the development of alternative fuel sources must become a main concern. The group adds that doing so, however, will require bi-partisan and public-private partnerships to build more wind, solar, geothermal, biomass and hydro facilities.
Long-Term Incentive
Obama’s plan signals a welcome shift for renewable energy technologies, whose deployment has been hampered by the absence of long-term policy stability, according to the American Wind Energy Association (AWEA).
The Center for American Progress contends the government should spend $3.5 billion to install solar panels with a capacity of two gigawatts on the roofs of federal buildings, and amend federal electricity contracting to allow for 30-year power purchasing agreements, states Dow Jones. Doing so, the report adds, would provide the long-term incentive that many renewable power companies and investors need to plow valuable - and currently very costly - capital and credit into new alternative energy projects.
Solar, Wind Outlook Growing Brighter
Venture capital firms add to the rosy outlook by continuing to pour billions into solar power, according to Energy Current. The report cites GreenTechMedia research in revealing that in the fourth quarter of 2008, VC firms globally invested $1.3 billion in 28 deals with solar companies - more than the amount invested into biofuels, wind energy, energy efficiency and the smart grid and batteries combined. Energy Current quotes Alex Klein, Research Director at Emerging Energy Research, as saying that weakened capital markets may constrain new project investment in 2009, “but the fundamentals for a significant transformation in energy infrastructure and the corresponding investment opportunity over the long term remain sound.”
Meanwhile, the AWEA says wind is already a mainstream option for new power generation, second only to natural gas plants in new capacity built from 2005 through 2007 (and probably again in 2008, pending year-end figures.) According to the group, wind provided 35% of all new generation added in the U.S. in 2007 (measured by market share.) Moreover, with 7,500 MW of new capacity expected when 2008 figures are released, wind is likely to contribute at least 35% of new capacity added this year.
A growing number of alternative-energy companies seeking venture financing are also growing more optimistic. Speaking at the Midwest Alternative Energy Venture Forum at Gleacher Center this past November, GSB News quotes Michael Polsky, President and CEO of Invenergy LLC, as saying, “We believe we will have a national policy that finally will take this country down a path to really rebuild our infrastructure toward renewable energy. We will not have research and development on a long, sustainable level unless we have a national policy. Researchers, scientists, and entrepreneurs simply will not stay in an investment field unless there are long-term obligations for their inventions.”
Are you working in energy or clean technologies? If you want to grow your career or your company’s talent needs, contact A.E. Feldman’s President, Mitch Feldman, today!
