The American Jobs Plan and What it Means for Renewable Energy
Introduced at the end of March, the American Jobs Plan sets ambitious targets focused on job creation and infrastructure improvement to build back better. President Biden’s plan aims to prioritize sustainable and resilient development of the United States’ economy to provide quality jobs for Americans in order to remain competitive in a global setting. Yet, this development cannot happen without a corresponding upgrade to our current infrastructure. Reliable infrastructure supports our everyday operations and enables opportunities that push us toward success.
The plan addresses many key issues; however, this post will focus on the aspects that more directly affect the renewable energy sector. Details of the plan can be found here and the budget breakdown can be found here for reference.
American Jobs Plan
The American Jobs Plan proposes $2 trillion of improvements across various sectors. Here we will focus on three major categories: energy infrastructure, manufacturing, and research and development. Investing in every step of the process, from the foundational infrastructure to near-term manufacturing to future research and development, the plan will advance the US renewable energy industry by increasing scalability and technological innovation. As a result, renewable energy solutions can be deployed in almost any situation and further diversify the energy landscape.
- Build a more resilient electric transmission system – $100 billion
- Modernize power generation to deliver clean electricity
- Extend the Investment Tax Credit (ITC) and the Production Tax Credit (PTC) for ten years and also include energy storage as an eligible technology – $400 billion
- Create clean energy block grants to encourage zero-carbon power, worker empowerment, and environmental justice
- Purchase 24/7 clean power for federal buildings
- Establish an Energy Efficiency and Clean Electricity Standard (EECES)Invest in the electric vehicle (EV) market by supporting domestic manufacturing, offering point-of-sale rebates, electrifying transportation, and building a network of EV chargers – $174 billion.
Improving the electric transmission system and encouraging more localized renewable energy generation will ease the stress on the electric grid and help mitigate potential large-scale power outages. With a more distributed grid, an outage in one area is less likely to affect the power supply of surrounding areas, decreasing disruptions to people’s daily lives. Additionally, incorporating clean energy into the overall infrastructure will significantly lower the amount of carbon emissions produced from simply generating electricity.
The transportation sector still relies heavily on gasoline and US motor gasoline consumption in 2019 resulted in about 1.095 billion metric tons of carbon dioxide emissions. Producing electricity with cleaner energy sources and promoting a switch to EVs can eliminate those emissions and bring us closer to the target of a 50% reduction in greenhouse gas pollution by 2030. However, a key aspect in reducing carbon dioxide emissions from the transportation sector by electrifying vehicles is that the electricity used to power those vehicles needs to be sourced from non-carbon dioxide emitting sources.
- Strengthen supply chains for critical goods, including semiconductors – $100 billion
- Federal support of domestic manufacturing of clean energy, storage, building and EV technologies – $46 billion
- Increase access to capital for domestic manufacturers to modernize supply chains, including the EV supply chain and other clean energy and grid technologies – $52 billion
- Extend the 48C tax credit program, also known as the Advanced Energy Manufacturing Tax Credit Program, to supply clean energy projects with American-made parts and equipment
- Create employment opportunities and build next-generation industries in distressed communities, such as green hydrogen and carbon capture projects
Prioritizing domestic manufacturing of systems and components necessary for a clean energy transition gives the US a competitive advantage in the global sustainability arena. Sourcing critical items in-house while continuing to leverage existing international relationships for other components can decrease some of the risks associated with global supply chains. It leads to a more resilient manufacturing environment and the main operation can continue in the event of a supply chain disruption.
Furthermore, with extra financial resources available for clean energy manufacturing, the industry will be encouraged to expand their operations. Manufacturing facilities create permanent jobs for all levels, from floor workers to managers, providing opportunities to people with varying skill sets. The workforce will develop valuable skills and attract further investment in the community, which can in turn spur economic activity in related industries.
Research and development (R&D)
- Invest in solutions needed to achieve technology breakthroughs that address the climate crisis – $35 billion
- Invest in climate R&D demonstration projects, including utility-scale energy storage, carbon capture and storage, hydrogen, and advanced nuclear, among others – $15 billion
- Launch Advanced Research Projects Agency – Climate (ARPA-C) to develop new methods for reducing emissions and building climate resilience
- Upgrade research infrastructure and invest in HBCUs and minority serving institutions to eliminate racial and gender inequities in R&D and STEM – $65 billion.
Much more R&D is needed to mobilize current technology in order to meet President Biden’s goals for decarbonization and a more sustainable society. There are many promising technologies that are successful on a small scale but have yet to be proven in larger applications. Additional resources and support from the federal government will undoubtedly lead to improvements and new discoveries that enable commercialization and widespread deployment.
The plan would also establish a Clean Energy and Sustainability Accelerator to mobilize private investment and procurements in areas such as renewables, storage, transportation, transmission, resiliency, efficiency, reforestation, agriculture, and industrial decarbonization ($27 billion). Coupled with public funding, the Accelerator will help funnel investment in up-and-coming technologies and showcase their potential.
Long Term Benefits
Nearly 3.4 million people work in clean energy sectors (renewable energy generation, energy efficiency, clean fuels, clean vehicles, and grid modernization and storage) in the United States and jobs are available in every state, regardless of geology or geography. These are stable jobs that pay well – clean energy workers earned a median hourly wage of $23.89 in 2019 compared with the national median wage of $19.14. Job growth is also highest in the clean energy sector, showing 6% growth from 2017 to 2019 compared to 4.4% growth in the overall energy sector and 2.7% growth for overall employment in the US. High salaries and lots of growth potential attract quality workers, resulting in long term value for the industry.
US Job Growth Rates by Energy Sector, 2017-2019 (Clean Jobs, Better Jobs Report)
Not only is clean energy good for jobs and the economy, it is also good for long term environmental and public health. Moving away from fossil fuel generation sources decreases the amount of carbon dioxide emissions produced and minimizes the harmful effects of climate change. It will bring us closer to the 2050 carbon neutrality goal while improving local environments and communities. Moreover, diversifying the energy mix with renewable energy will help build a more resilient energy grid, establishing a strong foundation for future energy needs. Robust infrastructure allows for further expansion and necessary adjustments to adapt to changing energy demand and ensures that critical energy supply is not interrupted. With its abundance and flexibility, renewable energy is a valuable option for almost any application.
The American Jobs Plan tackles significant challenges to improve job opportunities and national infrastructure to help the United States remain competitive in an increasingly fierce global environment. Specifically for the renewable energy sector, the emphasis on clean energy procurement and manufacturing will bring considerable investment to the industry and help expand renewable energy use. The plan will support millions of Americans that work in clean energy and adjacent industries, promoting sustainable living and long term success for generations to come.
Build Back Better (The White House) – https://www.whitehouse.gov/build-back-better/
The American Jobs Plan Factsheet (The White House) – https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/
The American Jobs Plan budget breakdown (Committee for a Responsible Budget) – https://www.crfb.org/blogs/whats-president-bidens-american-jobs-plan
Energy-specific aspects of The American Jobs Plan (Department of Energy) – https://www.energy.gov/articles/how-american-jobs-plan-will-advance-americas-energy-and-competitiveness-priorities
National Clean Energy and Sustainability Accelerator (PV Magazine) – https://pv-magazine-usa.com/2021/02/08/national-clean-energy-and-sustainability-accelerator-bills-introduced-in-house-and-senate/
Clean Jobs, Better Jobs Report (E2) – https://e2.org/reports/clean-jobs-better-jobs/
Carbon dioxide emissions data (Energy Information Administration) – https://www.eia.gov/totalenergy/data/monthly/index.php#environment
Interactive air pollution comparison (The New York Times) – https://www.nytimes.com/interactive/2019/12/02/climate/air-pollution-compare-ar-ul.html