Published in Energy

COVID-19 wipes out clean energy job gains as regulators explore effect on utilities

BY Sunday, April 26, 2020 06:52pm

The coronavirus has wiped out recent statewide clean energy job gains as Michigan companies take a patchwork approach to continuing work during the pandemic.

According to a study released by business and environmental groups this month, the U.S. lost 106,000 clean energy jobs since the outbreak started in March, including 5,446 in Michigan, or 4.1 percent of the state’s clean energy job sector. The report estimates national clean energy job losses could top 500,000, or 15 percent, as new unemployment data become available for the month of April. 

The report — released by Environmental Entrepreneurs (E2), the American Council on Renewable Energy, E4TheFuture and BW Research Partnership — analyzed U.S. Department of Labor data for March.

In Michigan, the pandemic has created a patchwork with ongoing projects. West Michigan’s major electricity provider, Jackson-based Consumers Energy, has planned to continue all construction projects. Some solar installers have halted work at the request of project owners. In-person audits and inspections for energy efficiency and clean energy projects have come to a halt.

The jobs report covers renewable energy, energy efficiency, clean vehicles and battery storage.

“It’s pretty staggering that Michigan is one of the highest in terms of states losing clean energy jobs right now,” said Michigan Public Service Commissioner Dan Scripps. “My hope is it’s short-lived.”

According to the report, Michigan had 125,365 jobs across clean energy sectors in the fourth quarter of 2019. More than 85,000 — or 68 percent — are in energy efficiency, which includes HVAC and renewable heating and cooling, lighting and advanced materials. The Holland-Grand Haven and Niles-Benton Harbor metro areas rank among the top 10 small cities nationally in the percentage of their overall workforce tied to clean energy jobs. The report ranks Michigan second in the U.S. for rural clean energy jobs.

“In general, people are just sitting tight on things and are not necessarily moving forward with new projects,” said Laura Sherman, president of the Michigan Energy Innovation Business Council. “A lot are in a holding pattern.”

In Minnesota, solar installers have been exempted from the state’s stay-at-home order and projects have continued there. Michigan defines energy as critical infrastructure and an essential job, but Sherman said MEIBC members are “making their own determination” — or it’s decided by the project owner — about whether to continue work.

Increasingly, clean energy companies are adapting, Sherman said. An executive order by Gov. Gretchen Whitmer earlier this month allowed for the online notarization of documents, which had been specifically requested by a large clean energy developer. Virtual audits for energy efficiency and virtual inspections for solar installations are becoming more common, Sherman said.

Meanwhile, clean energy advocates have made their case for stimulus funding, or at least reworking federal tax credits, to keep the project pipeline moving. They cite the construction job potential and the ability to reduce costs for ratepayers as key reasons the industry should see stimulus funds.

National business group Advanced Energy Economy and others have specifically called for direct payments in lieu of federal production and investment tax credits for wind and solar projects.

With an uncertain timeline for the economic coronavirus-related slowdown, advocates say clean energy workers can fill spaces while maintaining social distancing, for example by retrofitting empty schools with energy efficiency and renewable energy projects.

“That sort of creativity is probably what we’ll need as we think about getting back to work and meeting energy savings targets,” Scripps said.

Regulators launch COVID-19 oversight

On April 15, the Michigan Public Service Commission formally launched an oversight plan on utilities’ handling of the crisis, including disconnections for nonpayment and how future coronavirus-related costs will be recovered. Michigan utilities have agreed to not disconnect vulnerable customers based on income or medical needs. The order also outlines the process for utilities’ tracking of coronavirus-related costs.

While utilities have faced new costs including quarantining workers, net power demand in Michigan has decreased by 15-20 percent, Scripps said. Increased residential power usage has been roughly offset by commercial declines, while industrial power demand is down, reflecting trends across the country.

“They’re shocking numbers, but given the calamity not all that surprising,” Scripps said.

The MPSC order directed energy providers to affirm the availability of consumer protections around affordability and flexible payment options. The order also directs utilities to disclose continuity plans for energy efficiency and to track COVID-19-related costs, although there is “no guarantee” of future recovery, Scripps said.

The shift in power demand is raising questions about utility revenue and how those costs are being shifted among customers. In recent years, residential ratepayers have seen increasing electricity rates while those for larger, industrial customers have remained steady or declined. 

Scripps said the MPSC is in the process of understanding COVID-19’s effects on both utilities and ratepayers.

“We want to understand both the increased revenue and increased expenses,” he said. “We want to see both sides of the ledger.”

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