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Failed promise

Government help for solar power was supposed to be a triple play: jobs at a time of dire short-term need; incubation of a US industry sure to be important on a global scale in the next few years; and a long-term reduction in climate-changing pollution.

But at the same time that the Obama administration was pushing loan guarantees out the door the one to Solyndra evidently too quickly. SolarWorld the largest producer of solar cells in the Americas, was proudly asserting to its investors that labour expenses were less than 10 per cent of its costs.

Solyndra, which took $528 million in government loans before it declared bankruptcy, had a novel design, using cylinders instead of panels, and it was promising 1,000 or more jobs in the factory. But solar power, which makes extensive use of robots in fabricating the cells, and has no moving parts to service once it is up and running, may be an odd choice for job creation.

“It’s just not that labour-intensive,” said Howard Axelrod, an engineer and economist. And as for the jobs it creates, there may be a price elsewhere, Axelrod said. He described the energy world as being like a child’s squeeze toy: “You squeeze it and the eyes pop out. If you push in one area, something else is going to happen.”

Another economist, Seth Blumsack, an assistant professor of economics and energy at Pennsylvania State University, asked about making jobs, creating an industry and cleaning the environment simultaneously, replied, “It’s probably difficult to argue we are doing all three of those things successfully right now.”

That is not to say that the energy business does not produce jobs in his state. He said, “in the areas with the highest levels of natural gas drilling, the unemployment rate is basically about as close to zero as it could get.”

But the energy industries eat one another’s lunch. Jay Apt, executive director of the Energy Industry Center at Carnegie Mellon University in Pittsburgh, said it was possible to calculate the amount of electricity produced at a coal plant per person who works there. The number he cited per worker was about the same as would be produced over the course of a year by 20 megawatts of solar panels. Build enough solar plants and some coal plants will shut down; that would amount to firing Peter to hire Paul.

But despite all the emphasis on jobs, this relationship is largely unexamined. John Felmy, the chief economist at the American Petroleum Institute, pointed out that there were lots of good-paying jobs in the natural gas fracturing, or fracking, boom, but that implied fewer jobs in the coal sector, as natural gas displaced coal for electricity production.

But the analyses “tend to look at the individual industries,” he said, and does not go to the next step: “You’ve got these gas jobs so you don’t have these coal jobs.”

His group, a petroleum industry trade association, makes a different point, that drilling in the US means jobs here instead of jobs elsewhere in Canada, if the drilling is for natural gas, and all over the world if the drilling is for oil. But petroleum jobs are not politically favoured.

Something else not favoured, at least not by US policymakers, are jobs in China. But Chinese solar panels are flooding the US market, so much so that SolarWorld (which is a German company) filed a dumping case against China with the US authorities.

Nailing solar panels to a roof cannot be outsourced, but to some extent their manufacture already has been. Environment America, an advocacy group, said in a recent report that only about 24,000 people work in solar manufacturing in this country, compared with 52,500 in installation, out of a total of about 100,000. That is a hefty number, and up 6.8 per cent in the last year. But the definition is a bit slippery. It applies to workers who spend at least half their time on solar work.

Outsourcing to China is one end of the spectrum; there is a flip side. Some coal jobs exist here because coal is exported. The nuclear industry employs thousands of workers who provide components and services for reactors abroad. Solar panel fabrication was intended as an export industry, but whether the country will continue as a net exporter is not certain.

And if the electricity from the solar installation is more expensive than the energy it replaced, then everybody who uses electricity will spend a little more for it, and everybody who pays taxes will contribute to the government subsidies for solar. Thus there will be a little less money to spend on other activities that could also generate employment.

But this, too, is little examined. The Energy department said it did not have any studies on the subject. Damien LaVera, a spokesman, said that even if the manufacture of solar cells were not labour-intensive, construction of the Solyndra factory provided jobs. “Hiring a thousand construction workers for a year or two years is short-term stimulus,” he said. “They created 3,000 construction jobs in the worst construction downturn in the state of California’s recent history.”

Solyndra shut down operations at the end of August.

At a recent hearing of the House Energy and Commerce Committee, whose Republican majority has latched on to Solyndra with a vengeance, Scott DesJarlais, compared the benefits of solar power to the Tennessee farmer who drives into Alabama to buy watermelons for a dollar each and resells them at home for 75 cents.

“He does this a few times, and clearly he isn’t making a profit,” DesJarlais said. “And he comes to the conclusion that he needs a bigger truck.”

This may prove unfair in the long run. If fossil fuel prices rise high enough or governments begin to collect big charges for carbon dioxide releases, solar power could turn into an unsubsidised success. Renewable energy is recognised as representing a hedge against future shifts in the prices of fuels and the strictness of pollution regulations.

But the effect on jobs is murkier. “Net jobs” is seldom mentioned. The object now is to put more man-hours into each megawatt-hour, after years of trying to slim down the system and minimise labour input.

Some of the jobs could also eventually go elsewhere. Two years ago, Evergreen Solar, which got $58 million in aid from Massachusetts for a factory in Devens, said it would shift production to China instead. Such a move would offer only a small advantage in labour costs - because those are small to begin with - but US experts say the Chinese offer more lavish subsidies.

The debate is part of a larger discussion of what constitutes a “green” job. In October 2009, Congress gave the Bureau of Labour Statistics a special appropriation to count them.

The first problem was to define the term. The bureau, an independent statistical agency within the Labour Department, established two definitions: jobs in business that “produce goods or provide services that benefit the environment or conserve natural resources,” and “jobs in which the work performed makes the production processes of business establishments more environmentally friendly or use fewer natural resources.”

The problem is that lots of jobs are partly green and partly not. And, economists point out, some of the work that renewable energy creates goes to people who already have jobs roofers who install the panels or truck drivers who move them around, or steel workers who make towers for new wind machines.

At a House Energy and Commerce subcommittee hearing in September, members got into an extended argument with an Obama administration witness about whether the driver of a hybrid bus, with its lower pollution and lower fuel consumption, had a green job.

“Driving a bus is driving a bus, right?” said Representative Connie Mack, Hilda Solis, the secretary of labour, said they were “green buses.” But aides later clarified that the bureau counted any bus-driving job as green because it preserved natural resources.

None of this suggests that green is bad, just that it is not particularly job-heavy. In December 2010, Susan Combs, the comptroller of Texas, reported that school districts in her state were giving tax abatements to lure new jobs, but had to give $1.6 million for every wind energy job. Manufacturing jobs could be created for $166,000 each.

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