Green businesses blossom here
UMass report forsees job growth from eco-business investment
Saturday, November 22, 20081
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While cleaning up debris in Manhattan following the Sept. 11 terror attacks, Donavin Gratz began seriously thinking about the nation's dependency on foreign oil.
So Gratz, who now lives in Hatfield, started researching solar power. Following the 2001 attack on the World Trade Center, Gratz moved from the Big Apple to the Pioneer Valley and laid the groundwork to launch Green in Green, his solar-heating business.
The transition wasn't easy for the former woodworker - who now is in the vanguard of environmentally astute business people, developing the kind of business that experts say holds the potential to contribute significantly to the Valley's employment base.
"It was lonely," said Gratz, recalling the dearth of clean energy businesses around in the mid-2000s. "I had to really figure things out for myself."
At first, business was slow. Gratz, who took solar-energy classes at Greenfield Community College, was getting his feet wet in the new field. Finding customers as well as skilled laborers was a challenge.
Today, this is no longer a problem, he said. With the slumping construction market, contractors, plumbers and electricians who were too busy to experiment with jobs in the environmental field are now eager to take on projects for Green in Green, which employees three people, two interns and subcontracts work.
In addition, people looking to save money on their energy bills are increasingly seeking Green in Green to install solar panels.
"New home construction is way down," Gratz said. "Before, I was shunned as a solar person; they didn't want to deal with us because it's such a gray area in the rule books as far as codes go.
"Now there's a lot of quality labor that want to work in the field," said Gratz. Since opening his business in February 2007, he has installed 120 solar heating systems. About 90 percent of his jobs involve retrofitting homes with solar-energy systems.
Power of investment
In Massachusetts and other states around the nation, people are eyeing whether investing in the emerging green economy - making it easier for businesses like Green in Green to operate - could produce an industry able to provide new jobs and push back the recession.
In October, the most recent month for which data is available, the national unemployment rate hit 6.5 percent, with 10.1 million employable people without jobs.
With the right kinds of federal government investment, the green economy could produce 2 million jobs over the next two years, according to a recent report by the University of Massachusetts Political Economy Research Institute. These jobs could help drive the national unemployment rate from 6.5 percent down to 5.2 percent.
Many of the jobs would be in construction - an industry that has cut almost 1 million jobs due to tough economic times - and not require extensive additional training, the report says.
However, a significant government investment and leadership are needed to launch the green economy, politicians, analysts and people working in the green industry say.
Although supporting green technologies and jobs has received support from politicians in Massachusetts and President-elect Barack Obama, the nation is in the midst of an economic downturn. Money is scarce.
Massachusetts is grappling with a $1.4 billion deficit and predicting a shortfall in revenue for the next fiscal year. Credit for businesses and homeowners has dried up. Further, legislation is needed to level the playing field, green industry business owners say.
Today, it is hard to compete with the subsidized oil industry.
Still, people taking the long-term view of the economy hold out hope that an investment in green technology could help boost the national economic condition.
"It's going to be very hard to find the dollars to fund the pieces that we've done," said state Sen. Stanley C. Rosenberg, referring to green bills recently passed in Massachusetts, "but I'm convinced that we're going to try to keep with the agenda."
New state law
In August, Gov. Deval Patrick signed the Green Jobs Act, a bill that would pump $65 million over the next five years into development of the clean energy technology industry here in Massachusetts.
"This is where we think our future is going to be, in terms of economic development," Rosenberg said. "We'll work hard to find resources to keep that agenda moving forward."
The emerging green economy could lower the unemployment rate, but it may take a considerable commitment from the American people, according to the UMass report, "Green Recovery: A Program to Create Good Jobs & Start Building a Low-Carbon Economy."
Green jobs include businesses that develop, install or maintain renewable and sustainable energy resources, such as solar, wind or biofuel energies, as well as industries that implement energy-efficiency strategies and materials.
Focusing on a short-term clean energy and jobs promotion program, the UMass report suggests that it would take an investment of $100 billion in the green economy to create 2 million jobs.
The proposed investment would include tax credits that would assist private businesses and homeowners in financing commercial and residential improvements, as well as direct government spending on improving public infrastructure and federal loan guarantees to underwrite investments in renewable energy.
Jobs would be created across various fields, according to UMass.
The investment would create 935,200 jobs in the construction, manufacturing and energy fields; 586,000 in service and associated industry jobs; and 496,000 in "induced jobs" such as retail, wholesale and other industries that would be bolstered by money spent by the 1.5 million people working in new green jobs.
Of these jobs, UMass estimates Massachusetts would create 42,530 new positions through the green investment proposal, and would receive $2.4 billion in government dollars. The investment holds the potential to reduce the state's unemployment rate from 5.5 percent to 4.2 percent, the report claims.
"In the short term it would save a lot of energy and money and create jobs. It's a win, win, win," said Heidi Garrett-Peltier, one of the report's co-authors. "We can be doing something that fights climate change and is good for employment and the economy."
Labor said ready
Green employers in the Valley said the skilled labor needed to fill these jobs is mostly already present.
"Most jobs that are defined as green jobs are just regular jobs, whether you're an electrician or a plumber or a machinist or a laborer, whatever, they just happen to be in a green industry," said Lawrence Union, president of Northeast Biodiesel Co., LLC, which plans to build a biodiesel manufacturing plant in Greenfield.
Building skills
Still, some skills will need to be taught to employees seeking jobs in the green economy.
In the Valley, Greenfield Community College and the University of Massachusetts are offering classes to aid in the development of "green" industry skills. UMass has offered classes in green technology development for more than 30 years.
GCC is ramping up its green technologies course offerings with a new partnership that includes more than 40 area businesses eager to get their employees training. (See accompanying story.)
Union, of Northeast Biodiesel, plans to hire graduates of GCC's renewable energy and energy efficiency programs. Gratz draws interns from the college.
"People almost from the beginning were lining up to take the courses, and we have had a waiting list and overstocked classes every single semester," said Nancy Bair, GCC's director of workforce development.
Yet government investment and a trained workforce won't be enough to launch the green economy.
Legislation and education for the general public is needed as well, say people working in green industries.
Maintaining tax credits for home and business owners is a major component of the green economy's success, said Paul Herrmann, owner of Conway Trader Energy Systems in Hadley.
Herrmann, who started his business in 1977, said when former solar-power tax credits expired in the mid-1980s, his business plummeted.
"When the tax credit is not there and the price of oil is down, people don't think about it," Herrmann said. "Over the last couple years, business has picked up again."
The federal government offers tax credits on up to 30 percent of eligible costs to install solar and wind power, alternative fuel cell and geothermal systems. Massachusetts provides smaller income, property and corporate tax breaks for similar work. For more information, visit the state Web site for Energy and Environmental Affairs.
Credit gap
The nation's credit is also going to need to start flowing again. Union, president of the proposed Greenfield biofuel plant, said he is ready to break ground on the plant in the city's industrial park, but remains unable to obtain the credit he needs to start construction.
The plant will cost about $7.5 million to build, Union estimated. So far, his company has been able to secure $3.5 million.
"The credit crunch has hit us squarely in our development process," Union said. "It was difficult even before (the credit drought that emerged over the summer) primarily due to the perceived risk that traditional financing entities have with a new and what they consider risky venture in biofuels."
Union also suggested that for the green economy to soar, America will have to stop subsidizing oil and introduce more stringent carbon emission caps, as a result making green fuels more competitive.
Federal incentives and subsidies offered to the oil industry amount to an average of almost $9 billion annually, according to the UMass report.
"We need to start pricing fossil fuels at their real cost because they're not at their real cost," Union said. "We're not pricing in whatever the cost is for pollution, the greenhouse gases, the air quality, the asthma, the health effects. We need to understand the full cost of burning fossil fuel - and the alternatives."
