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In the economic downturn, “green jobs” has become one of the hottest political catchphrases. President Barack Obama has promised 5 million new green jobs as part of his energy and stimulus plans. Here in California, the mayors of Los Angeles and San Francisco, as well as the governor have made green jobs a priority. And states across the country, from Indiana to Washington, are considering bills to develop more green jobs.
This week as the sold-out Good Jobs, Green Jobs National Conference kicks off, and Congress sits down to vote on a new, pared-down stimulus package that includes billions for jobs in energy efficiency and clean power, “green jobs” are at the forefront of everyone’s minds. But the cleantech industry hasn’t proved to be recession-proof, and layoffs and hiring freezes are leading would-be green employees to question just how soon the jobs will arrive, and what kind of cleantech companies will be hiring. Here’s what we see:
Where The Green Jobs Ain’t Right Now:
In the near term, the recession has caused many large renewable energy developers to shed staff — the New York Times had an excellent article last week on the hard times for renewable developers. A big part of the problem is that debt and tax-equity financing dropped off late last year, making it far harder to finance new clean power projects. And after a period of high demand, high prices and high margins, manufacturers have been suffering.
The wind industry has been blown over. Clipper Windpower is laying off 90 workers at its Ceder Rapids, Iowa, plant and cutting its production for 2009. Gamesa is laying off about 180 workers at its plant in Fairless Hills in eastern Pennsylvania. Even Vestas Wind Systems, the world’s No. 1 turbine maker, is reportedly seeing lowered demand for its products.
In addition, younger startups in capital-intensive businesses — many of which grew too big too fast in the good times — are in varying stages of crash and burn. OptiSolar ramped up at an incredible pace out of nowhere and recently had to chop half its staff. Electric-car maker Tesla underestimated just how difficult it would be to raise the money to mass produce vehicles and started cutting staff last year. Basically, if you see a new firm that needs to raise hundreds of millions to manufacture a lot of gear in order to start generating revenues, it’s probably not a good idea to turn in your resume.
Where The Green Jobs Still Are:
In the near term, early-stage firms and less conventional sectors of cleantech are still providing jobs. Greg Chin, a partner at law firm Latham & Watkins, says he’s seeing a net increase in jobs among his early-stage cleantech clients, with jobs mainly in science, engineering and marketing. Amy Vernetti, a managing director at headhunting firm Taylor Winfield,
says many of the jobs are coming from more obscure cleantech sectors, such as fuel additives and air filtration. She pointed us to Accsys Technologies, which is hiring and has developed a nontoxic chemical process to harden fast-growing pine so it can be used in place of hardwoods or even steel.
Startups that are building tools that can help companies save money on their energy bills can still move product in a downturn, and many are still hiring skilled employees. IT companies like Sun Microsystems (s JAVA) are increasingly focusing on cutting the energy consumption in their data centers, which requires engineers, installers and designers. Sentilla, a startup that makes energy management services for data centers and industrial manufacturing, recently raised funding and is hiring engineers. Positive Energy, a startup that builds energy management reports for utilities, raised money in late 2008 and has over a dozen jobs for engineers, executives and designers listed on its site.
But a couple things to consider about these current openings: smaller, early-stage firms hire fewer people, and that means more competition. And getting those jobs will require more skill and experience than they did previously. “A lot of people might be trying to come into the sector at a time when many people have got a three- to five-year head start on them,” says Ron Pernick, a principal of research firm Clean Edge.
Down the Road: Green Jobs From the Stimulus
A lot of hope is being pinned on the green jobs that will be created in the stimulus package, particularly jobs in building out infrastructure. The package, if passed, could allocate $4.5 billion to build out a smarter power grid, which could create jobs for electricians, installers, engineers. Smart grid software company eMeter says it has seen increased interest from utilities based on stimulus expectations. Though other utilities are slowing their smart-meter rollouts in the face of the downturn.
The stimulus package is allocating a massive $6.2 billion to weatherize public housing, which would create jobs for local construction companies that can install new insulation and more energy-efficient windows. The DOE’s Weatherization Project Manager, Robert DeSoto, told us that every local agency that will be allocating these funds will be searching for new home retrofitters to work with.
The stimulus package also allocates billions in tax breaks for renewable energy projects. This could help those large clean power developers down the road that have recently been shedding staff. The more-established, later-stage companies are the ones that are far better poised to answer Obama’s call for “shovel-ready” clean power projects than new startups. And new projects could also create a substantial amount of construction jobs, which would have a far bigger impact on green jobs overall than a small number of highly-skilled openings for executives and engineers in Silicon Valley. Another bonus: clean power construction jobs can’t be outsourced.
While it remains to be seen how many green jobs the stimulus package will deliver, as Latham & Watkin’s Chin, says: “I expect the pickup in cleantech job creation to come before the pickup in the overall economy.”