Clean Energy Drives Economic Opportunity for the Middle Class
October 24, 2024
Last month, Vice President and presidential candidate Kamala Harris announced an 82-page economic policy platform outlining her plan to build an opportunity economy for the middle class.1Harris defines an opportunity economy as “a chance to compete and a chance to succeed” for everyone, pledging to lower costs for middle-class families.2
The vice president’s economic vision will lower energy costs by investing in critical industries of the future, such as clean energy manufacturing and innovation. Thanks to the historic investments of the Biden-Harris administration, including the Inflation Reduction Act (IRA), clean energy jobs grew at twice the rate of employment in the overall economy in 2023.3 The two fastest-growing occupations across the entire economy this decade are now projected to be wind turbine service technicians and solar photovoltaic installers,4 who earn 50 percent to 60 percent more, respectively, than the median U.S. worker.5 And today, clean energy construction and utilities see higher rates of unionization than both the average industry and the broader energy sector,6 indicating that workers are demanding—and winning—better standards to ensure clean energy jobs are stable and well-paying.
Clean energy investments are clearly an engine of economic opportunity for the middle class. The ongoing clean energy manufacturing renaissance is already driving economic opportunities and demonstrating how the clean energy economy in particular will play a fundamental role in building a strong, stable, and prosperous future by lowering costs and creating jobs accessible to everyone.
What is a clean energy economy?
As envisioned by the Center for American Progress, the clean energy economy delivers on the goal of 100 percent net-zero greenhouse gas emissions by 2050 or earlier while putting workers first through high-paying and high-quality jobs.7 It also requires a steadfast commitment to environmental justice to alleviate the disproportionate barriers underserved communities face, such as high levels of pollution, and must provide increased access to affordable renewable energy, electric appliances, and electric vehicles.
Creating an opportunity economy driven by clean energy starts with federal investments
The IRA injected unprecedented momentum in the clean energy industry through federal incentives, which have sparked a manufacturing renaissance. With estimates of private investments outpacing public investments 5 to 1,8 the IRA has signaled that the clean energy economy is here—and the market has responded. More than $490 billion in private and public funds have been invested in the clean economy since the passage of the IRA in 2022, a 71 percent increase over the two-year period before the IRA.9 In fact, in the two years since IRA passage, clean energy and transportation manufacturing investments have more than quadrupled compared with the two years before.10 Similarly, investments in that time frame increased 43 percent for clean energy production and industrial decarbonization, 56 percent for utility solar, and 130 percent for energy storage.11 Beyond boosting clean energy production, the IRA has lived up to its name: Since August 2022, overall inflation has slowed by 70 percent,12 energy prices have dropped 9.4 percent,13 total employment has grown nearly 4 percent,14and economic output is up 10 percent.15 The investment of hundreds of billions of dollars has spurred the clean energy industry into a time of economic growth.
What drives energy price spikes?
Despite former President Donald Trump’s claim that he would cut energy costs by 50 percent in a year if reelected, the president has no direct control over setting energy prices.16 Regardless of the limited action Trump could take to increase oil production, oil companies, which do have control over prices, are unlikely to cut prices in half since they would lose money on every barrel.17Increasing energy prices are heavily influenced by events around the world because fossil fuels are a global market.18 For example, the cost of electricity has spiked since early 2022, correlating with the Russian invasion of Ukraine.19 The crisis in Europe at this time raised crude oil prices, yet oil and gas companies profited by passing increased costs directly onto American consumers.20
Ultimately, the United States cannot drill its way to energy independence; clean energy is the best solution to ensure real energy security and lower price volatility.21 A report from Energy Innovation Policy and Technology finds that for many U.S. states that have significantly increased their wind and solar energy generation, electricity rates are rising more slowly than inflation.22 On the other hand, states most reliant on natural gas for electricity generation saw some of the highest rates of retail price increases since 2020.23
According to a recent study,24 a proposal laid out in the far-right authoritarian playbook Project 2025 would slow the growth of renewable energy, resulting in an increase in wholesale power prices of up to 22 percent in states such as Texas that have benefited from IRA incentives.25 In contrast, the clean energy path set by the IRA is expected to reduce retail electricity costs by up to 7 percent over the next decade.26 Creating a stable and secure energy sector through renewable energy means affordability for Americans.
Americans save money with the transition to a clean energy economy
In addition to limiting energy price volatility, as inflation slows, clean energy offers a long-term solution for lowering costs and helping build wealth for Americans.27
In a clean energy economy, households are projected to save up to $2,000 in energy costs annually per household by 2035.28 The IRA provides federal tax incentives and rebates for people ready to improve their energy efficiency and ultimately lower energy consumption, with 3.4 million families already saving more than $8 billion on clean energy and energy efficient investments in 2023 alone.29 Some states have launched their home energy rebate programs to help residents with cost-effective and energy-efficient home improvements such as adding insulation, switching to Energy Star appliances, or upgrading to a heat pump system; in total, these programs are estimated to help American families continue to save up to $1 billion annually through 2030.30
The IRA also offers a $7,500 tax credit for new electric vehicle purchases,31 which have lower total cost of ownership than gas-powered vehicles—even with the difference in up-front costs.32
Beyond these direct savings, clean and efficient energy use helps reduce other daily costs associated with climate impacts, such as health care, food, and insurance. Reducing reliance on fossil fuels results in a cleaner and healthier environment,33 lowering the health impacts associated with air pollution such as asthma, cancer, and premature death.34 In 2023, extreme weather events, such as heat waves and wildfires, were the main disrupter of food prices, contributing to rising costs.35 Additionally, a study published by the National Bureau of Economic Research found that climate-exposed households could face $700 higher annual home insurance premiums by 2053.36
Clean energy investments are contributing to the boom of new, high-quality, and accessible jobs
In 2023, the energy workforce saw the creation of more than 250,000 jobs—56 percent, or 142,000, of which were in clean energy alone.37 Clean energy jobs, in particular, grew more than twice the rate of the overall economy.38 Wind turbine service technicians and solar photovoltaic installers are projected to be the fastest-growing occupations over the next decade.39 In total, since the IRA was enacted two years ago, more than 330,000 new clean energy jobs have been announced.40
50–60%
The median wage increase of solar and wind energy generation jobs compared with all occupations
Employment in clean energy has steadily outpaced employment in other energy industries, particularly in fossil fuels.41 This is expected to continue all around the world: Between 2022 and 2030, the International Energy Agency estimates a net gain of 30 million clean energy jobs and a net loss of 12 million fossil fuel jobs,42 bringing about a possible 2-to-1 ratio of clean energy to fossil fuel jobs if net-zero is met by 2050.43 Under current Inflation Reduction Act policies, the Political Economy Research Institute estimates that the U.S. economy could see nearly 8.5 million additional jobs in clean energy over the next decade, including in the electricity (more than 5.7 million), manufacturing (more than 999,000), buildings (more than 717,000), transportation (more than 498,000), and agriculture (278,510) sectors.44
On average, clean energy workers earn higher wages compared with all workers nationally, exceeding national averages of up to 19 percent.45 Jobs in solar and wind energy generation, in particular, pay 50 percent to 60 percent more than the median wages for all occupations.46 In addition, unionization rates in clean energy (12.4 percent) have surpassed the average rate in the energy sector (11 percent)47—meaning that more clean energy workers are gaining access to higher wages, better benefits, and increased workplace safety thanks to the negotiating power of unions.48
Jobs in clean energy are accessible to a wide variety of skill sets and offer entry-level and training opportunities.49 In addition, the expected growth of the clean energy industry may create more jobs by the 2030s than the workforce is prepared to fill.50 States are mobilizing to fill the gap—with a bipartisan group of 24 governors launching the Governors’ Climate-Ready Workforce Initiative to jointly train 1 million new registered apprentices by 2035.51 The program will create state-run apprenticeship programs in partnership with skilled trade unions, community colleges, and companies, and it will allow workers to earn while they are trained across a variety of clean energy and climate occupations.
The Governors’ Climate-Ready Workforce Initiative is the most recent of multiple training and apprenticeship programs created in the past few years, ensuring opportunities for anyone to begin a clean energy career, regardless of their educational background, experience, or where they live. Since 2022, several government offices,52 nonprofit organizations,53 and private companies have announced training and apprenticeship programs for clean energy jobs,54 including U.S. Department of Energy (DOE) programs for jobs in battery manufacturing and energy efficiency.55 In 2023, there was a 44 percent increase in registered apprenticeships in the energy industry over the past five years,56 largely driven by requirements in investments from the Infrastructure Investments and Jobs Act and the IRA.57 Apprenticeships are stable and benefit workers: 90 percent of apprentices remain employed with the employer that trained them, and over their career, apprentices generally earn more than their nonapprenticed peers.58
The DOE has worked to ensure the growing clean energy workforce is diverse, with opportunities for people from underserved communities, people of color, people with disabilities, and first-generation college students.59 For example, the agency has created funding opportunities to advance clean energy education, such as the Historically Black Colleges and Universities (HBCU) Clean Energy Education Prize and the Offshore Wind Centers of Excellence.60The U.S. Department of Labor has also set a goal of 7 percent for disability inclusion in apprenticeship programs, with organizations stepping up to fill clean energy apprenticeship needs;61 some clean energy companies, such as the Texas-based Adaptive Construction Solutions, where almost 20 percent of apprentices self-identify as having a disability, have exceeded this standard.62
While Project 2025 sets the economy back, clean energy creates economic growth
The IRA launched the U.S. economy onto a track that benefits all Americans, and yet there are published plans to repeal it, including in the 900-page policy manifesto for a far-right presidential administration called Project 2025.63 Another report from Energy Innovation Policy and Technology highlights the grave consequences of repealing the IRA, expanding liquefied natural gas, and eliminating energy standards—all goals of Project 2025. The report finds that this huge step backward would lead to 750,000 lost American jobs, increase household energy costs by $40, and decrease the U.S. gross domestic product (GDP) by $320 billion per year in 2030.64
The same Energy Innovation report forecasts an increase of 1 million jobs, household energy savings of $250 per year, and an increase of $450 billion per year in the U.S. GDP, all in 2030, if the United States achieves its nationally determined contributions target established under the Paris Agreement—a goal moving the U.S. toward a 100 percent clean energy economy.65
State clean energy accomplishments are threatened under Project 2025
Clean energy jobs grew in all 50 states and Washington, D.C., last year.66 Looking at the five top energy-producing states,67 Table 1 presents some quick facts from the 2024 U.S. Energy and Employment Report and the negative impacts, based on modeling from Energy Innovation, that would result from Project 2025, which includes repealing the IRA and pollution standards.68
TABLE 1
Conclusion
The uptake of clean energy in America is already providing a path to stabilize prices and drive economic growth, especially through job creation. The more than $78 billion that the federal government has invested in lowering consumer costs and uplifting the clean energy sector since the IRA became law shows the possibility of a prosperous economy filled with opportunities for all.69 To build a better future and economy for all Americans, the next administration must continue investing in the clean energy industry.
The authors would like to thank Shannon Baker-Branstetter, Jessica Ordóñez-Lancet, Leo Banks, Devon Lespier, Shanée Simhoni, and Trevor Higgins for their contributions. The authors would also like to thank Robert Benson, Jessica Vela, Natalie Baker, and Emily Gee for their input. The views expressed in this issue brief are solely attributable to the authors.
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