Clean Energy Compensation Policy, Completed Internships

The Biden administration announced final regulations Tuesday codifying applicable salary and work experience requirements that clean energy project managers must meet to receive increased tax credits.

By meeting Treasury’s work requirements, developers can earn five times the base credit amount under the 2022 Climate Reconciliation Act. Eligible credits include renewable electricity production, clean electricity investments, and clean hydrogen production credits.

While a version of these requirements was already in place, special presidential envoy for climate John Podesta said on a call with reporters that the final guidelines “will give developers and the workers they employ clarity and confidence that clean energy jobs will be good jobs.”

The applicable wage requirements would apply to any employee or mechanic employed on the project, including any contractor or subcontractor. Prevailing wages in a given area are set by the Department of Labor under a 1931 law known as the Davis-Bacon Act.

The apprenticeship requirement would require interns to work a certain percentage of their total project time. However, the final rule would still allow a project to qualify for increased tax credits if it made a “good faith” but ultimately unsuccessful effort to fill apprenticeship positions.

Treasury Secretary Janet L. Yellen said the final rules would help support the administration’s strategy of supporting “people where there is potential but not opportunity.” Yellen pointed to a Treasury Department analysis from March that found that since the bill was signed into law in 2022, clean energy investments have disproportionately gone to counties with higher unemployment rates and lower college completion rates.

Sean McGarvey, president of North America’s Building Trades Unions, said these rules will help ensure that clean and renewable energy projects provide “a living wage for a middle-class family,” noting that until recent years, many clean energy projects paid less than in similar positions in the fossil fuel sector.

“Our experience over the last 100 years has been that (the fossil fuel industry pays) the highest wages and benefits, while that has not been the case in the renewable industries that have developed over the last few decades,” McGarvey said. “With these new rules in place, there will be a huge increase in the number of people who currently exist in this industry, and hundreds of thousands of people will have opportunities to join this industry.”