Renewable energy advocacy groups like Clean Energy Economy Minnesota, or CEEM, often claim that clean energy is a major jobs engine for our state. In fact, CEEM released a report claiming a whopping 61,000 people work in the clean-energy industry in Minnesota.
There is a major problem with such numbers: They aren't a count of what most people would consider clean-energy jobs. When thinking of clean-energy jobs, most people probably visualize someone installing a solar panel or a wind turbine. But 46,191 (approximately 76 percent) of the jobs counted as clean energy in the CEEM report are jobs in the heating, ventilation, and air conditioning industry and people who build and install energy-efficient doors, windows, appliances, and lighting.
The wind and solar industries employed only 12 percent of the total clean-energy jobs in the report. And even those, overwhelmingly, were temporary jobs.
In Minnesota, it is reasonable to assume that as many as 81 percent of the jobs in the wind and solar industries were temporary construction jobs, because no conventional power plants were built last year. This would mean just 2 percent of 61,000 clean-energy jobs in Minnesota were non-temporary construction jobs in the wind and solar industries in 2018. Hardly a jobs panacea.
While renewable-energy advocates are quick to take credit for jobs that have little to do with wind or solar, they ignore that rising electricity prices - caused by mandating intermittent and expensive sources of electricity on the grid - result in significant job losses.
The Center of the American Experiment recently released a report that used the economic modeling software IMPLAN, the industry standard for economists. It determined that 20,950 jobs would be destroyed by higher electricity prices if Minnesota were to pursue a 50 percent renewable-energy mandate.
These jobs losses would be most pronounced in energy-intensive industries like manufacturing and mining, where electricity costs are highest. In fact, a 50 percent renewable-energy mandate would cause electricity prices to increase by 40 percent and increase costs for Minnesota iron mines and paper mills by nearly $200 million annually. This is the equivalent of 2,490 high-paying mining jobs with annual wages of $80,000, which is nearly twice the annual average wages paid in St. Louis County.
If new jobs create new wealth by providing goods and services more efficiently than before, then everyone prospers. The problem here is that wind and solar are not creating more output for less input; they are using more capital to produce less electricity than their conventional counterparts. This is not called economic growth; it is called inefficiency, and this is a bad thing.
When Minnesota lawmakers mandate and subsidize renewable energy, they are not creating value for consumers; they are simply funneling money into the energy sector that would otherwise have been spent elsewhere.
This jobs report will likely draw favorable media coverage, but a deeper look at the numbers exposes that these clean-energy jobs numbers are artificially inflated - and St. Louis County would be in danger of job losses if Minnesota continues down this road.
Isaac Orr is a policy fellow specializing in energy and environmental issues at the Center of the American Experiment, a think tank in Golden Valley, Minn. He can be reached at firstname.lastname@example.org or followed on Twitter @thefrackingguy.