As with other industries, the Renewable Energy sector has experienced a series of challenges brought on by the COVID-19 pandemic. Today, over 10-months into the pandemic, renewables continue to be hard hit in three key areas.
Before COVID-19, an estimated 3.4 million Americans across 50 states and the District of Columbia worked in clean energy occupations. According to E2’s Clean Jobs America report, that’s more people working in the real estate, banking or agriculture industries, and three times the number of Americans with jobs in fossil fuels. In fact, at start of this year, the American Council on Renewable Energy predicted that employers would be adding more than 175,000 green energy jobs.
But when the pandemic hit in March, more than 106,000 U.S. clean energy workers lost their jobs. Fast-forward just two months and that number climbed to an astounding 447,208. Now, as the year comes to a close, that number is expected to increase to 478,000 based on analysis of Department of Labor data. According to the E2 report, the top three industry sectors hit the hardest by job losses were energy efficiency (336,670 losses), renewables (75,669) and clean vehicles (34,151). Unfortunately, the consensus from experts is that the renewable energy industry may not have yet hit rock bottom when it comes to job losses.
As the job losses indicate, many sectors in the Renewable Energy industry have put green projects on indefinite delays because of COVID-19. According to the Solar Energy Industries Association and as reported by Green Tech Media, social distancing efforts and stay-at-home orders — including mandates that have put limitations on door-to-door sales and installation of residential solar and solar farm operations — have brought solar industry construction projects to a crawl.
Wind companies were also expecting a banner growth year in 2020 until the pandemic hit. According to the American Wind Energy Association, COVID-19 has put an estimated 25 gigawatts of wind projects at risk, representing $35 billion in investments and including the potential loss of over $8 billion to rural communities in the form of state and local tax payments and land-lease payments to private landowners.
Less Liquidity and Fewer Financing Options
With more projects sitting idle and incomplete for an indefinite period of time, it has been difficult for some sectors to meet their contractual/financial obligations for specific projects. For example, analysis by the AWEA reports that at the start of the year, there were a record number of wind projects under development. However, due to pandemic-related delays, it has become increasingly difficult for projects to come online to meet financial/economic contracts, which could ultimately result in project cancellations. With liquidity becoming scarcer, the industry is seeing investors move away from what they feel may be risky business opportunities. Unfortunately, this can also impact new and emerging markets that may be looking to finance projects, as well as smaller developers with a limited pool of liquid assets.
Across the nation, many firms working in different green energy sectors will have to adapt as new challenges created by the pandemic continue to unfold in 2021. The good news is that with the new administration, there will likely be an emphasis on how to sustainably rebuild the economy as the nation recovers from the pandemic.
At Worldwide Facilities, we’re helping Renewable Energy businesses nationwide meet the specialized insurance challenges of the rapidly growing renewable energy sector. To learn about our unique insurance solutions to problems that arise in this ever-changing industry, contact Loren Henry at email@example.com or 619-541-4265.