Influence of high road labor policies and practices on renewable energy costs, decarbonization pathways, and labor outcomes

Abstract

Achieving an economy-wide net-zero greenhouse gas emissions goal by mid-century in the United States entails transforming the energy workforce. In this study, we focus on the influence of increased labor compensation and domestic manufacturing shares on (a) renewable energy technology costs, (b) the costs of transitioning the U.S. economy to net-zero emissions, and (c) labor outcomes, including total employment and wage benefits, associated with the deployment of utility-scale solar photovoltaics (PV) and land based and offshore wind power. We find that manufacturing and installation labor cost premiums as well as increases in domestic content shares across wind and utility-scale solar PV supply chains result in relatively modest increases in total capital and operating costs. These small increases in technology costs may be partially or fully offset by increases in labor productivity. We also show that solar and wind technology cost premiums associated with high road labor policies have a minimal effect on the pace and scale of renewable energy deployment and the total cost of transitioning to a net-zero emissions economy. Public policies such as tax credits, workforce development support, and other instruments can redistribute technology cost premiums associated with high road labor policies to support both firms and workers.