The Inflation Reduction Act ties the hefty 30% Investment Tax Credit (ITC) and any potential top-ups for any solar and/or energy storage project above 1MW to salaries and learning in force within the framework of the construction/installation of the said project. What exactly do these terms mean? And will they help attract more human beings into the labor pool of the solar industry?
The following is an excerpt from the Q4 edition of Solar Builder magazine. Be sure to subscribe here (print, digital or both) today. It’s free.
What is a prevailing wage?
Current wage standards specify hourly wage rates for workers (including apprentices) in the skilled construction trades. Current wage laws also require contributions to worker benefits such as health care, paid vacation, retirement funds, and apprenticeship training.
For some solar projects, requiring a going wage could certainly increase worker wages. Combining this with apprenticeships is beneficial for promoters who are focused on reducing their overall labor costs (apprentices are paid less), but also for the workforce, as apprenticeships offer an excellent career path and equity benefits.
What is an apprentice?
This refers to Registered Apprenticeship Programs (RAPs), both state and federal. To obtain the tax credits, any apprenticeship program used to meet the requirements must be registered. Federal regulations require that apprenticeships last at least one year – one year to learn through a base of on-the-job experience and related instruction. In total: at least 144 hours per year of training and 2,000 hours per year on the job. State regulations are quite similar but may be stricter in some cases. PARs in the construction industry typically last 2-5 years, with the majority being at least 4 years.
RAPs are a great way to formalize training to work in certain professions and build a formalized path to a more sustainable career in that industry. PARs are also a pathway to bring more veterans into a profession. Veterans can waive GI Bill tuition and instead receive a housing allowance (potentially a few thousand per month) upon signing a HBP.
A potential problem for solar companies to meet IRA requirements (and build the necessary workforce) is that RAPs can only be registered for DOL-approved occupations and solar installer is not a federally recognized profession.
How many apprentices do I need?
The apprenticeship requirements are aimed specifically at “mechanics and tradesmen” during the construction phase of a project. The foreman level would not apply, nor would design, development, project management or finance. Minimum requirements of the following percentages must be met, beginning 60 days after the Treasury Department issues the relevant guidance:
- 10% this year
- 12.5 in 2023
- 15 percent 2024 on out.
Keep in mind that each of these apprentices also needs a mentor (usually a 1:1 ratio). This means that another 15 percent associates will be the supervisors of these apprentices.
This also applies to subcontractors.
“Any contractor with at least four employees will need to have at least one apprentice,” says Lawrence. “You can’t just meet them having 25% of your work in a learning area and not worry about the rest.”
What is an accredited profession? And why isn’t the solar installer included?
For the DOL to recognize an occupation, there must be consensus within the industry presented by employers to demonstrate this need. There are questions around the role of a “solar installer” and this role is different on large scale projects and a residential project.
“The apprenticeship system is designed to provide a comprehensive education in a particular profession, similar to the way associate’s and bachelor’s degree degree programs provide a comprehensive education in the fundamentals of a particular field of study”, explains Richard Lawrence, program director at the Interstate Renewable Energy Council (IREC). “A challenge for solar installation is that there is no common framework regarding who can do what type of work on a job site. Some states have licensed occupations specific to solar or renewable energy, others classify solar energy as electrical work that can only be done by electricians, while some have identified specific tasks that must be done by electricians and can be done by laborers or other people business. “
This is where the stiffness comes in. There are overlapping professions, but there is no consensus on the role of a solar installer. “Workers in each of the trades compete for their share of the pie and DOL regulations require occupations ‘to be clearly identified and commonly recognized across an entire industry’ to be apprenticed.”
The solar installer is recognized by some states (some have it under “limited electrician license”) and therefore have approved RAPs. Florida and Oregon are two notable examples, the latter covering all renewables up to 50kW.
California, on the other hand, recognizes “solar installer” as an approved occupation with a license, but has not approved an apprenticeship program in which to train solar installation employees.
Meanwhile, the state has just passed Assembly Bill 2143, which classifies all non-residential net-metered (and residential > 15kW) solar projects in the state as public works. All construction work on these projects will be subject to similar wage and apprenticeship requirements from 2024 – with 20% working hours required for apprentices, although, again, there is no no such state program exists.
To show creativity
While waiting to see if that ever changes, the DOL is able to recognize creative interpretations of existing professions.
There are over 1,000 federally approved occupations that can be apprenticed to, and it’s common to take an existing occupation and leverage it to meet the needs of the employer. The Construction Craftsman, for example, is a two-year PAR, meaning to generally help with labor on a wide variety of construction projects.
“The Construction Craft Laborer apprenticeship standards can be used to train individuals for solar installation roles such as site preparation, shelving installation, and module assembly,” says Lawrence. Other examples of adjacent occupations include electricians, operations engineers (someone who manages equipment), pile drivers…” A company will need to look at all the different job roles on that site and see what fits into existing professions that are already approved.”
Another example: The Utility Workers of America worked with Consumers Energy on an apprenticeship program for utility workers who maintain utility-scale solar, wind and energy storage plants, using the profession of “energy auditor”, which generally refers to a person who enters a building. to review energy needs and make recommendations on how to reduce energy loads.
Run a RAP (or source from one)
An employer must make a commitment to this apprentice as an employee, and the apprentice increases his remuneration over time. Every hour of their work should be documented as to what they learn, as they need certain hours for certain tasks. They must also follow additional instructions.
So it’s a commitment. ReVision Energy, based in Mass., is a great example of a small company running a quality RAP.
If that seems like too much of a commitment, you can go through unions for some functions as they will have RAPs, or work with community colleges or another community organization.
Another option is a group program run by multiple employers that could operate as a consortium or professional association.
“There are a lot of options and flexibility, but it will take a long time to figure out what those options are,” Lawrence says.
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