Wind Jobs at PTC Risk: Not 37,000 per AWEA but 2,525 (these million-dollar jobs displace real jobs, too)
“The Congressional Joint Committee on Taxation, for example, has estimated that the cost of a one-year PTC extension is $12.1 billion. Thus, even accepting the Report’s grossly inflated number of 37,000 wind jobs, the cost to the American taxpayers would be $12.1 billion divided by 37,000, or about $327,000 per job. [But] … the cost for a one-year PTC extension could be as much as a staggering $4,792,079 per direct up-front job added ($12.1 billion ÷ 2,525 jobs).”
An intellectual nail has been driven into the wind-industry-driven Production Tax Credit, a governmental lifeline keeping an inherently flawed industry afloat. The new study, Inflated Numbers; Erroneous Conclusions: The Navigant Wind Jobs Report, was authored by Charles J. Cicchetti, a noted economics consultant and longtime economics professor (now adjunct) at the University of Southern California.
The remainder of this post highlights parts of the study (in blue).
The study’s key findings include:
- When calculating potential job losses, Navigant used the wind industry’s self-serving, inflated forecasts for wind capacity “lost” without the PTC, which exceeded the federal government’s non-biased forecasts by as much as 55%.
- Navigant’s analysis also incorrectly applied one model to determine direct job losses in key states, inflating them by at least 100%. Incorrectly applying another model resulted in questionable multipliers that inflated job loss estimates by at least another 72%.
- The Navigant report narrowly focuses on supposed jobs lost in the wind industry if the PTC isn’t extended but completely ignores the U.S. economy as a whole. If new generating capacity is needed and jobs are the measure, other sources of electricity, such as coal, nuclear power or natural gas, would create more direct jobs than wind power for an equal amount of new generating capacity. In a separate May 2010 report, Navigant actually acknowledged that wind power produces fewer jobs, direct and indirect, than other sources of electricity for an equivalent amount of capacity.
- Subsidizing wind is very costly per job created. A one-year PTC extension could cost as much as a staggering $4.8 million for each direct wind manufacturing and construction job added.
Economics 101 Corrections
“Navigant’s job creation methodology never asks: ‘Compared to what?’ Wind is not the only choice…. If 20,200 MWs of generating capacity were actually needed, based on Navigant ’s own methodology, alternative generation and plant life-extensions would add more jobs than wind.”
Cost per ‘Saved’ Job
“The Congressional Joint Committee on Taxation, for example, has estimated that the cost of a one-year PTC extension is $12.1 billion. Thus, even accepting the Report’s grossly inflated number of 37,000 wind jobs, the cost to the American taxpayers would be $12.1 billion divided by 37,000, or about $327,000 per job. [But realistically given this study's correction] … the cost for a one-year PTC extension could be as much as a staggering $4,792,079 per direct up-front job added ($12.1 billion ÷ 2,525 jobs).”
‘Under any circumstances, however, using energy policy to create jobs is inefficient, and is even worse when policy attempts
to pick the “winners” as it does with the PTC. Rather than continuing to subsidize wind with the expensive PTC, if additional
generation resources are needed the more economic approach would be for providers to invest to extend the life of nuclear and
hydroelectric facilities, reduce pollution at coal-fired units, and build conventional generation.” (p. 6)
“Using energy policy to create jobs is never cost effective and is especially bad policy when used to pick “winners” by providing
extraordinarily expensive subsidies like the PTC. Moreover, under any circumstances, the Report’s wind capacity and job loss
numbers have no credibility and should not be relied on to support any further extensions of the PTC. The Report’s numerous
calculation errors included:
• Using biased, self-serving industry forecasts and estimates, which created “lost” wind MWs estimates that are between 20%
and 55% higher than impartial government wind capacity forecasts.
• Incorrectly using the JEDI model, which alone inflated job losses by at least 100% in the key states that were reviewed.
Incorrectly applying the IMPLAN model using questionable multipliers, which inflated job losses by at least another 72%.
• Failing to consider other generating technologies that have greater job gains than wind per unit of capacity.
Given these numerous flaws the Report’s job loss numbers are meaningless and provide no support for extending the PTC.
Rather, extending the PTC will unnecessarily cost taxpayers billions of dollars and will not create any net American jobs. To the
contrary, extending the PTC will reduce, not increase, American jobs.”