Inflation Reduction Act poised to create thousands of union jobs in Minnesota – Duluth News Tribune

The two-year-old Inflation Reduction Act is fulfilling its promise of accelerating the country’s transition to renewable energy while creating good-paying, union jobs along the way.

The Climate Jobs National Research Center, a labor-led organization on clean energy jobs, tallied 6,285 utility-scale clean energy projects in development across the country that could be eligible for IRA tax credits tied to labor standards.

That includes 105 clean energy projects in Minnesota — solar, wind, hydro and battery storage — that are estimated to create 10,382 jobs.

“Solar is exploding,” said Jason George, business manager for the International Union of Operating Engineers Local 49, which represents workers across Minnesota and the Dakotas. “It’s really spurred development of much needed energy projects and infrastructure projects.”

The IRA is also transforming the labor force building those thousands of solar farms from one reliant on itinerant, low-wage workers to one made up of union tradespeople. To qualify for the 30% tax credit, project developers must pay a prevailing wage, which usually tracks closely to the local union wage, and they must hire a minimum number of apprentices. Projects that don’t comply with the labor standards may be eligible for just a 6% credit.

The higher wages for construction workers have a small impact on the overall cost of projects, especially in comparison to the high cost of lawyers and consultants needed to ensure regulatory compliance, according to Heatmap’s reporting. Still, developers say getting the higher tax credit is “worth the squeeze.”

George said he’s seeing the biggest shift in the Dakotas, where utility companies haven’t reliably used union labor on solar and wind projects like in Minnesota. He said he’s hearing that project owners are telling developers that new projects have to be union built to ensure they get the tax credits.

“We’re like a guarantee,” George said. “You can try to mess around with a non-union contractor that might try to start an apprenticeship program, but we’ve been doing this for 100 years.”

Many states have struggled to scale up apprenticeship programs. George says the labor shortage is a real challenge in construction but not for his union. IUOE Local 49 has 300 Minnesota public high school students working their way toward an apprenticeship, and another 500 people have met the entrance requirements.

George said there’s also billions of dollars in investments in transmission lines coming to Minnesota so the electric grid can handle the increasing demand for electricity.

Minnesota hasn’t seen the same growth as its peers like Wiscsonsin, which is projected to add 42,366 jobs, or Colorado, with a projected 78,759 jobs. The biggest gains are in the Sun Belt states like California, Texas, Arizona and Nevada. That’s partly a function of their climates, but George says Minnesota also needs to compete harder with tax incentives if it wants to attract big projects.

There are some caveats to the report: Namely, that not all projects being planned may actually get finished, and determining eligibility is a complicated process that is ultimately up to the federal government.

There’s also an important caveat to the labor standards: They only apply to the construction of renewable energy projects, not the operations once they’re complete. Plus, the number of people needed to maintain a solar farm or wind turbine is far less than the number needed to build them.

This story was originally published on MinnesotaReformer.com.