A federal mandate for renewable electricity could ensure U.S. competitiveness with China on clean fuels and create thousands of home-grown jobs by wooing manufacturers that have been turned off by America's unsteady support for the industry, according to a new study commissioned by an alliance of 19 energy firms and trade groups.
"China is absolutely killing us," said Don Furman, a senior vice president for wind energy company Iberdrola Renewables, a member of the RES alliance.
"America owned this industry 20 years ago," he told reporters. "And we have given it away because we haven't had a coherent national policy supporting renewables."
A renewable electricity standard (RES) would force utilities to get more renewable power on the grid.
Applied nationwide, the law would "guarantee" a long-term market for renewable energy, according to the report, prepared by Chicago consulting firm Navigant. That's in contrast to the years of short-term tax credits that have characterized Washington's clean power commitment to date.
"While tax credits continue to play a critically important role in preserving the viability of existing facilities, an RES is needed in order to support both near- and long-term investments," the alliance said.
According to the group, companies are more likely to build factories for solar panels or wind parts where the market for the product is and will exist long term.
"The jobs are not going to come here unless manufacturers see long-term certainty," said Furman.
The study found that a strong RES of 25 percent by 2025 would create 274,000 jobs over doing nothing, with every state seeing job creation. Of those jobs, 50,000 would be solar related and 116,000 would be in the wind industry.
"This total is significantly higher than the expected jobs supported in the current House and Senate provisions under consideration in Congress," the alliance said.
Under the Waxman-Markey cap-and-trade bill that narrowly passed the U.S. House in June, utilities would be required to meet a goal of 20 percent renewable energy by 2020. Energy efficiency improvements could count for up to 8 percent of that target, a loophole that dents the measure's green jobs potential, the study said. Currently, the bill remains a long shot for passage in the Senate.
Other reports have shown as much. According to research by the Union of Concerned Scientists released last year, a 25 percent by 2025 RES would create 297,000 new jobs. Under its analysis, the policy would also lead to $263.4 billion in new capital investment and save consumers $64.3 billion in lower electricity and natural gas bills.
Navigant said that without a such a nationwide RES, some states would actually lose clean electricity-supported jobs to overseas competitors; California, for instance, would shed over 20,000 jobs.
Currently, about 30 states have renewable portfolio standards in place.
So far, "states have actually created the demand" for clean power, said Furman. But the work suggests that this current patchwork of policies is not enough to drive the kind of growth that has been seen in China.
For the last two years, China has been the world's number one producer of solar cells, and in 2009, it became the largest manufacturer of wind turbines. The nation also doubled the amount of power generated from wind last year, according to the Global Wind Energy Council.
"China is scaling faster than anybody else is today," said Charles Gay, president of Applied Solar at Applied Materials.
In May, Beijing declared plans to achieve 100 gigawatts of wind power capacity by 2020. Currently, total wind installations worldwide add up to 158 GW. "That gives long-term certainty," said Furman.
The announcement is attracting big capital investments in China and creating jobs that will not come back to America for a long period of time, said Furman.
"Once those investments are made in a manufacturing facility, those jobs are lost," he said.
The U.S. saw its own wind explosion of sorts in 2009, and it remains the world's No. 1 in terms of wind power use, according to data from the American Wind Energy Association. The nation added a record 10 gigawatts despite the economic recession.
"Each gigawatt is equal to one nuclear power plant," said Furman. "That is a lot of wind."
But the difference is, the boom came largely on the back of hefty stimulus grants announced in 2009 and several short-term tax credit extensions, on top of the state-level standards, the alliance said, not long-term national policy.
The fear is that without a stable policy that covers all states, the U.S. will miss out on the economic benefits of its own clean energy growth.
"We need to be able to take advantage of the fact that our own needs for energy can be met by our own technologies," Gay said.