President Joe Biden's administration has introduced final rules for new clean energy subsidies, aiming to make jobs and wages in green industries competitive with those in the oil and gas sector.
The guidelines, designed for companies seeking tax credits linked to job quality, align with Biden's vision of leveraging climate change efforts to create millions of well-paying jobs with benefits.
The Inflation Reduction Act, enacted in 2022, earmarks approximately $370 billion in subsidies for solar, wind, and electric vehicles. Under the new Treasury Department rules, companies paying prevailing wages to workers and hiring apprentices for projects eligible for IRA tax credits would receive five times the base credit of 6%. This provision aims to incentivize companies to increase pay in a sector that has historically lagged behind industries like nuclear energy, natural gas, and coal.
Sean McGarvey, President of North America's Building Trades Unions (NABTU), highlighted the significance of the new rules, stating, “With these new rules in place, there will be huge increases for many, many people that are existing in this industry right now and in the hundreds of thousands of people to join this industry with middle class, family-sustaining wages and with good health care and post-retirement benefits.”
The administration is encouraging companies to adopt project labor agreements, which establish wage and employment terms between trade unions and contractors for specific projects, to ensure compliance with the rules.
