COVID-19 Has Slowed Green Energy Industry, But Experts Say It Should Bounce Back
Green energy businesses had been seeing growth, but the COVID-19 pandemic has changed that.
“We’re all doing the best we can in the new normal here,” said Kevin Gombotz, vice president of Envinity, a green design and construction company.
Envinity is based in State College, but Gombotz leads Envinity’s commercial division out of Gainesville, Florida. Much of what it does is in the health care industry — helping hospitals make their buildings run more efficiently and preventing problems before they crop up. That includes designing or modifying air systems to contain infectious diseases like COVID-19.
“A better building is about a lot of things other than just energy performance,” Gombotz said.
Like much in construction, the green energy industry has been slammed by the impact of the COVID-19 pandemic.
When COVID-19 began appearing in the United States, Gombotz said they realized they were going to have to shift their work. Envinity’s commercial division does business in Pennsylvania, New Jersey, Maryland, New York and Florida.
“In the industry, they call it COVID response,” he said. “It’s how are they adapting their facilities to the changing needs now of having a more infectious population.”
Key to that is creating more negative pressure rooms for patients. Those areas are used for patients with infectious diseases like COVID-19. The low air pressure stops the air from leaving the room, while fresh air is allowed to come in.
“When you add more exhaust to a building because of more isolation rooms for COVID patients, then you need more outside air,” he said.
Gombotz said what’s happening now could change the way hospitals are designed in the long run, with a need to be able to adapt to a pandemic.
“There’s new thought towards, well, now that we have more time to plan for readiness for a potential second wave or what happens next flu season, the strategy is going to be to shift to be more orchestrated and less on the fly,” he said.
Jason Grottini, Envinity’s vice president of residential energy services, said while residential work may slow down, commercial and agricultural business is expected to keep coming in.
“We laid off 16 people, which predominantly make up our entire field operations staff, so carpenters, renewable energy installers, service technicians, HVAC installers,” Grottini said.
That’s about a third of the company’s employees. But, construction in Pennsylvania was allowed to start again on May 1. Between that and a federal Paycheck Protection Program loan, Envinity has hired everyone back.
The company doubled its solar work force this past year. They had four to six months of work lined up, with projects like solar panel installation.
“Before COVID-19 hit, we were on track to add another five or six people to that team,” Grottini said. “We’re probably going to slow that down a little bit here into the summer. But, if things pick back up where they left off, I could see us certainly adding three to five more people, creating those jobs by the end of the year.”
Now that they’re headed back to field work, employees had the option of staying home — but so far no one has. They all got special training and they’re taking extra precautions, including setting up hand-washing stations at job sites.
Grottini and Gombotz are optimistic about the company’s outlook. And experts say the sector is in a position to bounce back.
Ravi Manghani, global head of solar at Wood Mackenzie, a research and consulting company based in the United Kingdom, said shelter-in-place orders hit residential and small commercial businesses in the solar industry hard.
They expect at least half of residential installations to be at risk in 2020. And they’re expecting about 40 percent of businesses that were looking to deploy solar won’t this year.
“Just looking at those two numbers, the job losses in this segment could be anywhere from 10, 15 percent to as much as up to half the workforce could be without jobs in the coming months,” Manghani said.
A lot could depend on how long the slowdown lasts. Manghani said in the absence of a drawn-out recession, the industry should be able to bounce back. They’re projecting a pre-COVID market size for 2021.
The low price of gas and oil and the low demand for energy right now as COVID-19 slows the economy are also challenges for the industry.
“It might lose the edge a teeny bit, but for the most part it’s still going to be an economically viable proposition,” Manghani said.
Environmental and industry organizations would like to see the federal government step in.
For Joseph Ottis Minott, executive director and chief counsel of the Clean Air Council, that would mean making an investment in green energy part of any COVID-19 economic stimulus package.
“It’s horrible. It has tanked the economies around the world, especially in the United States right now,” Minott said.
But, he added, there’s a chance to get something good out of all of that.
“Or are we going to decide that it’s simply easier to invest in the fossil fuels, the fuel of the last century, if you will, because that’s what we’re used to,” Minott said.
Two renewable energy trade groups wrote to Congress asking for that support, including an extension of tax credits for solar and wind energy. Meanwhile, the fossil fuel industry is also seeking help during the pandemic. Oil and gas companies asked the Federal Reserve to let businesses use money from the Main Street Lending program to pay down debt — and the Fed made that change.
Ravi Manghani points to one other factor that could play a role in the renewable energy industry's recovery — whether President Trump is reelected.
“I think it’s safe to say there won’t be any additional favors to the clean energy industry,” Manghani said.
But, Manghani said, if presumed Democratic nominee Joe Biden wins, the outlook could be different.