When Doreen McDowell, executive director of manufacturing for General Motors, came to Rochester back in January, she made it very clear that the auto giant was looking to the future.
When she announced that GM will be investing $12 million in the Lexington Avenue plant so workers can build intake manifolds and fuel rails for the sixth generation V8 gas engines, she said that a significantly larger investment is being made in electric vehicles.
Ultimately, General Motors will spend $56 million to enable the Rochester plant to produce battery-pack cooling lines for electric vehicles.
Production of gas-powered vehicles put GM on the Fortune 500 list but the auto maker now is working to shape the future that seems to say “adapt or get run over.”
“The cost of inaction far outweighs the cost of action,” said Abigail McHugh-Grifa, executive director of the Climate Solutions Accelerator, of how companies and the public need to approach the push toward clean energy.
Indeed, that’s why Ljungstrom, a company headquartered in the Allegany County village of Wellsville, has totally transformed itself, with 60 employees now making components for the offshore wind sector.
“It’s a former fossil fuel company,” said Kevin Hale, director of economic development and strategic partnerships for NYSERDA. “They’ve gone from a company that had a primary focused on fossil fuels to one that is exclusively focused on supporting this new industry around offshore wind.”
McHugh-Grifa and Hale were joined by Matt Vanderbrook, director of commercial origination at Greenspark Solar, and Alan Knauf, an environmental law attorney at Knauf Shaw LLP, for the Rochester Business Journal’s recent Clean Energy virtual panel discussion.
There is a cost to green investment, but state and federal programs help reduce private investment while also fueling the economy through job growth.
Federal legislation through the Infrastructure Investment & Jobs Act, the CHIPS and Science Act and the Inflation Reduction Act will provide $500 billion in incentives for green energy initiatives. The belief is that together those initiatives will create nine million jobs.
“The prize is very big,” Hale said. “Combined with the global trends with the domestic policy activity here, we’re seeing a lot of activity.”
The state of New York has aggressive green energy benchmarks. The state wants two million climate-friendly homes and 70 percent of energy coming from renewable sources by 2030. By 2040, there should be a zero-emissions electric grid.
“New York has really positioned itself not only to be a very large market for clean energy,” Hale said, “but also a market to help develop our economy and transition away from fossil fuels in a way that benefits our local communities and delivers household-sustaining jobs.”
A NYSERDA study in December of 2021 identified 165,000 jobs across New York directly associated with clean energy efforts, from manufacturing and assembly of equipment to installation and servicing of the technologies, Hale said.
The Climate Solutions Accelerator, which cosponsored the RBJ virtual discussion with Greenspark Solar, works to create a healthier, more equitable and environmentally sustainable community by catalyzing local efforts to eliminate greenhouse gas emissions and address the effects of climate change.
McHugh-Grifa believes climate change is very much a threat, but also an opportunity for the region, where transportation produces about 33 percent of all greenhouse gas emissions and another 25 percent comes from commercial and residential real estate.
“Our collective well-being depends on our ability to achieve a just transition to a regenerative economy,” she said. “A regenerative economy operates in sync with earth’s natural systems, repairs past degradation and harm, values multiple forms of capital and builds the health and long-term resilience of people and places.”
Solar energy can help provide some of those solutions for homeowners and businesses.
“One of the biggest benefits for a business or a residence or a not-for-profit is the ability to provide a hedge against high electricity prices,” Vanderbrook said. “I think we all experienced over the past year what high electricity prices mean, and solar is one of the few things that you can do to help address that. Once you’ve paid for solar and been sold solar, that’s the electricity rate you pay. You company’s not going to be subject to these unknown costs (for electricity).”
There’s an indirect gain as well: The public sees a commitment to environmental stewardship.
“There’s the benefits of how the market views your company in supporting clean energy and supporting the local economy,” Vanderbrook said.
Within the Inflation Reduction Act is an extension for 10 years of the 30 percent investment tax credit for green energy. That extension provides assurance to investors that their project will benefit from the credits, but there now is a requirement for prevailing wages in construction of any large project.
Other incentives will be available if the project uses a certain percentage of equipment manufactured in the United States, if it’s an affordable housing development or if it’s built on a brownfield.
“There are multiple tax credits,” Knauf said. “You can get 50 to 60 percent tax credits, and if you go on a brownfield, you can get another 24 percent. So, if you can stack those, you can maybe get 74 percent or 84 percent tax credits for doing a renewable project on a brownfield in New York.”
Site approvals from local agencies can cause project delays, which is one reason New York enacted Executive Law Section 94-c. The provision created the Office of Renewable Energy, a state agency that can supersede other state and local approval processes on projects of 25 megawatts or greater.
But Knauf said there is legitimate concern about solar projects infringing on agricultural land. Green proponents need to balance the need to for green vs. the need for food. Some of that farmland is near the electrical transmission infrastructure, making it ideal for solar.
“A big conflict that’s going on now in our area of the state is there are utility-scale solar projects being sited all over rural areas,” Knauf said. “What it’s doing is using up good farmland, so that’s a major conflict. Can the farmers co-exist? They can get a lot of money from the solar developers but we’re losing good farmland.”
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