A new apprenticeship requirement could slow federally funded energy projects – The Hill

by | Nov 7, 2022 | Energy

Billions of dollars are at stake over a little known provision in President Biden’s signature climate legislation. The bill made headlines for providing more than $369 billion in investments, loans and tax credits to boost new decarbonizing and clean energy technologies. But making progress on these energy projects rests on a crucial but little-discussed provision — the speed at which the federal government can approve new apprenticeships.  

The Inflation Reduction Act (IRA) extends production and investment tax credits to incentivize the buildout of new energy projects. But several of these credits offer a bonus for projects that comply with the federal prevailing wage provisions of the Davis-Bacon Act and also ensure a portion of the total labor hours are performed by registered apprentices. For example, the maximum tax credit for carbon capture and sequestering projects jumps from $50 per metric ton to $85, but only if companies meet these labor requirements. Wind, geothermal, gas or solar projects meeting these tests can receive a tax credit five times larger than those that do not. 

These new financial incentives will create a surge in demand for a form of workforce development that combines paid on-the-job experience with formal education to help a worker acquire the specific skills and knowledge needed for better paying jobs. Since apprenticeship programs are driven by employer demand, there is a tighter connection between the credentials earned and what employers need. What began primarily as a training model for trades has sin …

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