Renewable energy study overstates job benefits

A study that supports a North Carolina renewable energy purchase mandate has been criticized as “somewhat deceptive” in the way it calculates employment benefits from renewable mandates for the state.

The North Carolina Sustainable Energy Association recently released the study claiming that the 2007 S.B. 3 mandate had created 21,163 job years of employment and brought in $1.7 billion in benefits for the state.

However, after reviewing the study,

Paul Bachman, director of research at the Boston-based Beacon Hill Institute at Suffolk University, said the job-years measure used by renewable energy advocates is a somewhat deceptive way to tally employment. He adds that many of the jobs that proponents say have been created by the mandate are likely to be temporary positions in construction-related fields as new capacity (such as solar arrays and biofuel plants) is built to handle a different type of energy. He also notes that the study fails to account for job losses that occur inevitably when investment is shifted from productive uses the market supports to higher-cost alternatives such as renewable energy.

State House Reps have prepared a bill to repeal the mandate and are claiming majority support for their repeal bill.

The intent of H.B. 298 is to claw back the portion of Senate Bill 3 passed in 2007 that requires periodically scheduled increases in the cost of renewable energy to be purchased by utilities, which pass on the higher costs to consumers.

While there has been growth in the heavily subsidized solar energy market, other mandated renewable sources such as swine and poultry waste and biomass have not caught on even as ratepayers’ bills have risen.

Interestingly, one portion of the report that claims  the job benefits for North Carolina also made this claim.

Although the economic output and fiscal impacts are estimated to be positive, we estimated that the substitution of renewable energy for conventional energy is a slight negative to employment over the study period, primarily because of reduced consumer spending from the REPS [Renewable Energy and Energy Efficiency Portfolio Standard] rider.

Study authors claimed the slight negative was overshadowed by larger job growth elsewhere. However, critics of this study argued against the “job years” metric as confusing, due to double counting of the same job as a means of making them seem permanent. They also pointed to another study which had found that the REPS would cause a net loss of 3,078 jobs by 2012 (3,592 jobs by 2021).

21. March 2013 by Jason Hayes
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