IRA’s labor standard requirements could create 3.9M ‘high-quality’ jobs: report

IRA’s labor standard requirements could create 3.9M ‘high-quality’ jobs: report  Utility Dive

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Aug 26, 2024 - 10:30
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IRA’s labor standard requirements could create 3.9M ‘high-quality’ jobs: report

IRA’s labor standard requirements could create 3.9M ‘high-quality’ jobs: report

The Inflation Reduction Act and its Impact on Clean Energy Job Creation

The Inflation Reduction Act’s tax incentives tied to labor standards could generate around 3.9 million jobs across 6,285 clean energy projects in development, according to a new report from the Climate Jobs National Resource Center.

Report Highlights

  1. Each of the 6,285 projects examined in the report could be eligible for IRA incentives tied to labor standards.
  2. The labor standards include hiring a certain number of registered apprentices and offering pay that meets the prevailing wage.
  3. Meeting these standards allows developers to maximize their IRA benefits, presenting an opportunity to boost pay and job quality for clean energy workers across America.
  4. The provision requiring the prevailing wage helps ensure that clean energy jobs become lifelong, family-sustaining careers for workers nationwide.

“It seemed like all the good jobs were hours away. You kind of had to choose between raising your kids or making enough money to support them. You just couldn’t do both,” said Caleb Littlefield, a member of the International Union of Operating Engineers Local 4 working on Walden Leeds Solar in Leeds, Maine, in a release from the CJNRC. “But the [IRA] is changing that. Those investments are creating good union jobs that make people’s lives better.”

Labor unions can assist with the implementation of the IRA by providing a highly-skilled, well-trained, and reliable workforce that can execute large-scale, complex projects effectively and efficiently, according to the report.

Job Creation Potential by State

  • Texas has the highest potential with 1.2 million jobs.
  • Nevada is the runner-up with 552,442 jobs.
  • Vermont and D.C. lag behind with 215 and 208 jobs, respectively.

Job Creation Potential by Clean Energy Sector

  1. Battery projects offer the most job creation potential, with a possible 2.6 million new battery jobs.
  2. Standalone solar is the runner-up with 723,909 jobs.

Addressing Labor Shortages and Apprenticeship Requirements

The clean energy industry has been facing labor shortages, along with a lack of registered apprentices. The final guidance from the IRS on its wage and apprenticeship requirements provided a “good faith” exception, allowing employers who made a genuine effort to hire apprentices but were unable to find any to still claim the tax credit.

The report also highlights an incentive for developers to enter into Project Labor Agreements, which are pre-hire collective bargaining agreements negotiated between employers and construction unions. These agreements help developers easily meet the IRA’s labor standards, maximize their federal tax credits, tap into a trained union workforce, and avoid project delays.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

  • SDG 8: Decent Work and Economic Growth
  • SDG 9: Industry, Innovation, and Infrastructure
  • SDG 13: Climate Action

2. What specific targets under those SDGs can be identified based on the article’s content?

  • SDG 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
  • SDG 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
  • SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

  • Number of jobs created in clean energy projects
  • Number of clean energy projects eligible for tax incentives tied to labor standards
  • Percentage of clean energy workers receiving pay that meets the prevailing wage
  • Number of registered apprentices hired in clean energy projects
  • Number of states with potential job creation under the Inflation Reduction Act (IRA)
  • Number of battery jobs and standalone solar jobs created
  • Number of developers entering into Project Labor Agreements

Table: SDGs, Targets, and Indicators

SDGs Targets Indicators
SDG 8: Decent Work and Economic Growth SDG 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
  • Number of jobs created in clean energy projects
  • Percentage of clean energy workers receiving pay that meets the prevailing wage
  • Number of registered apprentices hired in clean energy projects
SDG 9: Industry, Innovation, and Infrastructure SDG 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
  • Number of clean energy projects eligible for tax incentives tied to labor standards
SDG 13: Climate Action SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.
  • Number of battery jobs and standalone solar jobs created
  • Number of developers entering into Project Labor Agreements

Source: utilitydive.com