January 30, 2012
January 30, 2012
"Successful renewable energy programs and energy efficiency projects over the past few years have proven that there is significant potential for Ohio to meet the growing demands of the clean energy sector. The new Green Manufacturing Action Plan report affirms it and proves that Ohio can’t afford to stand on the sidelines while other states and countries compete to win good jobs in one of the world’s fastest growing industries."
Shanelle Smith, Ohio BlueGreen Alliance
The Ohio Green Manufacturing Action Plan
Next Steps in a Clean Energy Manufacturing Policy Agenda for Ohio
Over the past five years, Ohio has created policies that prioritized clean energy and sought to rebrand the state as “America’s Energy Gateway.” The state started incentive programs for renewable energy installations and energy efficiency projects, and also passed an Alternative Energy Portfolio standard mandating greater use of renewable and advanced energy resources. Unfortunately, Ohio’s energy policies have been less aggressive in their attempts to build a strong clean energy product supply chain to aid Ohio’s large manufacturing sector. There has been progress, but not enough. Policies specifically targeting the advancement of clean energy manufacturing are scarce.
Ohio can’t afford this ambivalence toward one of the world’s fasting growing industries. The state has lost over 400,000 manufacturing jobs since 2000 and needs to reassert itself as a manufacturing hub. The infrastructure and expertise remain in place: Ohio still has over 630,000 skilled manufacturing employees and the sector accounts for almost one-fifth of the state’s gross domestic product (GDP). Ohio policymakers should bolster the manufacturing sector by doing more to support those trying to compete in the growing clean energy industry.
Clean energy manufacturing is similar in many ways to traditional manufacturing and many existing firms are already making the component parts needed for clean energy systems. This is not an exotic economic activity. It is a crucial opportunity for the existing workforce and manufacturing base to supply new demand for their products.
One priority is for the state to implement policy mechanisms that increase access to capital for Ohio clean energy manufacturers (CEMs). Since the financial crisis and subsequent recession, private lenders have become extremely cautious and capital has become insufficiently accessible. For CEMs, these difficulties are exacerbated by clean energy’s status as an emerging industry that remains unfamiliar. This feeds perceptions of higher risk. In reality, green industries are rapidly growing worldwide and Ohio companies have already seen gains from investing in clean energy. Demand for renewable energy — and all of the manufactured component parts and equipment that come with it — is growing internationally and countries are vying for market share. Ohio needs to invest in its CEMs to stay competitive and make sure the state gets its share of family-supporting manufacturing jobs.
In order to offer advice on what steps Ohio can take to win the competition for clean energy jobs, the Ohio BlueGreen Apollo Alliance has convened a task force comprised of representatives from the business, investor, labor, policy, and environmental communities. The following are the Ohio BlueGreen Apollo Green Manufacturing Action Plan (GreenMAP) policy recommendations for the creation of clean energy manufacturing jobs in Ohio.
Our recommendations in the realm of finance focus on bolstering Ohio’s current clean energy policies with capital access programs exclusive to clean energy manufacturing. Currently, Ohio lacks any financing programs focused solely on clean energy manufacturing. State aid to clean energy manufacturers is sporadic and difficult to attain. Grant programs and tax credits are helpful but do little for companies requiring loans to develop their product lines and enter the market. For this reason, we recommend that Ohio create a loan program exclusive to clean energy manufacturers. Further, loan programs should seek to maximize the benefit of public dollars by leveraging private investment.
In addition to new loan programs targeting clean energy manufacturers, we recommend the continuation and expansion of tax incentives and grant programs aimed at the clean energy industry, so long as they have standards and conditions in place to ensure appropriate use of funds. These policies have lowered the costs of becoming more energy efficient and producing one’s own renewable energy, and have increased demand for the clean energy products that are manufactured here in Ohio.
In addition to these new financing mechanisms and incentives, we also recommend:
• Prioritizing support for small to mid-size clean energy manufacturers.
• Continuing and expanding support for research and development.
• Continuing and expanding support for existing clean energy manufacturing clusters.
• Expanding workforce development programs to train employees for these new industries.
• Expanding Ohio’s demand-side clean energy policies.
• Pushing for improvements in clean energy manufacturing policy at the federal and regional levels.
Policies and programs should in all cases be structured to advance the objective of growing good green jobs in Ohio’s clean energy manufacturing sector. The following principles should guide policy development to help achieve this objective:
• Take into account positive supply chain building and job creation effects.
• Prioritize and incentivize investments based on in-state content production or job creation.
• Include family-supporting wage and benefit requirements.
• Include reasonable clawback provisions for companies that fail to meet requirements after receiving a state incentive.
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