Although a new jobs report shows Ohio with a net gain in renewable energy jobs last year, most of those jobs were for out-of-state projects.
As a result, industry experts say, the state lost out on additional jobs that would have been local, well-paid and ongoing.
And despite the overall net growth, Ohio’s wind industry lost more than 1,400 jobs last year, according to the report by the Clean Energy Trust and Environmental Entrepreneurs.
Industry experts attribute that loss to a combination of two 2014 state laws, Senate Bill 310 and House Bill 483. SB 310 amended and put a two-year “freeze” on targets for the state’s renewable energy and energy efficiency standards. HB 483 basically tripled the property line setbacks for wind turbines, effectively blocking most new commercial wind farms in the state.
The new report, showing a total of 100,782 clean energy jobs in Ohio, is “a pretty big deal” in light of the two laws, noted Ted Ford, president of Ohio Advanced Energy Economy. Nonetheless, he said, it’s in the state’s interest to adopt policies that will maximize job growth in the industry.
“It’s not clear to me that there’s any other industry where we would decide as a state we don’t want those jobs,” Ford said.
In Ford’s view, though, that’s exactly what HB 483 and SB 310 did. “We’re just holding ourselves back, and it’s not a productive way to go.”
At a minimum, his industry group wants to “get that freeze over with and get back to business.”
The new jobs report showed Ohio leading the Midwest in the total number of jobs “across the value chain for clean energy,” said Ian Adams of the Clean Energy Trust.
In other words, Adams explained, the Clean Jobs Midwest report counted not only people who develop and install projects within an individual state, but also manufacturers in a state who make and export components for clean energy projects “around the country and around the world.”
In Ohio, as in other states, the large majority of jobs were in the energy efficiency field. Yet the solar industry managed to add 2,815 jobs, despite the fact that the market for solar renewable energy credits had mostly stalled after enactment of SB 310.
That growth resulted in large part from firms’ aggressive pursuit of out-of-state business, Ford said.
“I have to admit that when SB 310 was under consideration, I was one of the people that thought our industry would shrink in the aftermath,” Ford said when the results were announced last week. “These companies have been very determined to expand their opportunities beyond Ohio, and we’ve seen significant growth.”
Cleveland-based Talan Products is a case in point. The metal stamping company has shifted most of its traditional building materials business to make equipment for solar panel installations.
“It’s ironic that [of] our products, very few of them are used in Ohio,” company CEO Steve Peplin said. Except for one large in-state customer, “all the major stuff gets installed outside of Ohio.”
GEM Energy, headquartered in Wallbridge, has a similar situation. “We are growing, which is a good thing, but we’re focused mostly out of state in our development,” said Jason Slattery, who directs the company’s solar operations.
The loss of wind energy jobs is particularly disturbing, Ford noted. “We’ve seen a real drop-off in jobs related to wind energy.”
“A more stable policy environment fostering sustained wind power growth in the state can work to reignite Ohio’s wind supply chain,” said John Hensley at the American Wind Energy Association.
And new project development “can lead to lasting job creation” at multiple levels, Hensley added. Such jobs could include positions in engineering, development, construction, and project operations, as well as more work in the manufacturing and supply chain.
In Ford’s view, policy makers should worry about those lost jobs in wind energy. “They’re jobs of the future, and they’re well paid,” he said.
In contrast, Ford said, utilities’ plans to guarantee sales from certain nuclear and coal-fired power plants would not provide any permanent job growth. At best, he noted, they might temporarily delay the inevitable closing of those plants and loss of the associated jobs.
“The real question is how do you bridge between where we are today and where we need to go,” Ford said.
Even in solar energy, the state is missing out on jobs it otherwise could have, Slattery noted. For example, he said, when the company installed solar panels at the Toledo Zoo several years ago, the project didn’t just put people to work making those panels. It also put people to work on the local construction project. And it created the equivalent of two to three full-time jobs for the ongoing maintenance of the project.
Now, for out-of-state projects, those jobs “are going to other states,” Slattery said.
And although customers have expressed interest in adding clean energy in Ohio, Slattery said, “unfortunately, the fact of the matter is we’re not able to do that because bringing investments into the state of Ohio is very difficult right now because of the policy.”
“The atmosphere just isn’t conducive to people starting up new businesses when there’s so much uncertainty,” Ford said. “As long as those standards are up in the air, it’s very hard to determine how to finance a project.”
“Just because Ohio is good in manufacturing and is a significant player in clean energy across the country doesn’t mean Ohio shouldn’t have a robust portfolio in its own state as well,” Adams added.
“The clean energy economy is growing fast, and you’re really starting to see competition heat up between states seeking to attract clean energy businesses,” said Jeff Benzak of Environmental Entrepreneurs. “So it only makes sense that clean energy executives are paying close attention to the policies and the tone that’s coming out of Midwestern state capitals.”
As Ford sees it, the current policies are also a disincentive to other businesses that are committed to using clean energy for their own operations.
“We probably already missed some opportunities,” Ford said. Indeed, while new Amazon data processing centers are set to open near Columbus, only part of their wind energy will come from a grandfathered project in Ohio. The majority will come from North Carolina and Indiana.
A pending bill, HB 190, would let local counties decide whether to revert to the prior setbacks for wind farms. That bill has been sitting in committee since Ohio House Republicans introduced it last spring.
Another pending bill, HB 472, was introduced by state representative Fred Strahorn (D-Dayton) last month to “unfreeze” the renewable energy and energy efficiency standards and repeal the HB 483 setback for wind farms producing at least 50 megawatts of electricity. The bill has been referred to the same Public Utilities Committee as HB 190.
Meanwhile, Gov. John Kasich has said that continued suspension of the clean energy standards is “unacceptable,” despite a recommendation last fall by a lawmakers’ committee to do just that and to further reduce the standards.
Those standards were already modified significantly when SB 310 was passed in 2014.
Among other things, the legislature removed the in-state requirement for both solar and non-solar renewable energy. The 2014 amendments also significantly broadened the definition of what counts under both the renewable energy and energy efficiency standards.
Although various advocates and company representatives would prefer to see stronger standards, getting the freeze lifted is the first order of business for industry leaders right now.
“We’d just as soon have the freeze lift and then have a debate about what the standards ought to be,” Ford said. That’s currently set to happen at the end of 2016, unless the state legislature takes action before then.
“We’d rather see the standards come back,” Ford stressed. “[Even] in their diminished form, they’ll still have an impact.”
“Without a doubt, the stronger clean energy policies a state has in place, the more clean energy jobs they can expect their private sector to create,” added Benzak.