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June 2024

Tri-Trade Agreement Sets Stage for Solar Boom While Preserving IBEW Work
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The recently announced National Tri-Trade Solar Agreement solves the thorniest problems facing developers of solar projects larger than 1 megawatt, clearing the way for a revolution in how the U.S. produces energy.

The IBEW and the unions representing operating engineers and laborers promoted the agreement at a Washington, D.C., event in April that included major construction contractors and federal officials.

"Whatever issue a developer has, this solves it. Whatever question a developer has, it's in the agreement," International President Kenneth W. Cooper said. "We call it a national agreement, but really it is a national solution."

John Podesta, senior White House adviser on climate change policy, opened the day declaring that the Inflation Reduction Act makes hiring union construction workers a "must-do."

"This [agreement] is the future of the solar industry in America. I urge every developer to deepen your relationship with your local unions and get in on this deal," he said.

The Inflation Reduction Act, signed by President Joe Biden in 2022, radically changed the incentives for businesses that build large-scale solar by quintupling tax credits for projects that pay prevailing wages and use registered apprentices for at least 15% of the total labor.

The tri-trade agreement offers developers a promise that if they sign and keep their obligations, their projects will have the manpower they need and will qualify for every tax credit and incentive available.

"The best thing about this agreement is that it is IRA-compliant. You sign on to this, you don't have to worry," said Brent Booker, general president of the Laborers' International Union of North America.

The room was filled with local leaders from the three unions; senior officials from the Treasury and Energy departments; and dozens of representatives from developers and contractors including Rosendin Electric, Cupertino Electric, M.J. Electric, A.L.L. Construction, CS Energy and Independence Excavating.

The opportunity for IBEW members in large-scale solar development is enormous.

Power demand is growing nationally, due to the electrification of cars, homes and buildings, along with the onshoring of manufacturing. Thanks to Biden administration industrial policy reforms, domestic manufacturing construction investment has nearly tripled in three years, to a $224 billion annual pace in February.

The demand for carbon-free energy is particularly noteworthy. Artificial intelligence and data centers in particular are booming, and they almost uniformly need carbon-free energy.

"The IRA is like a treadmill turned up to warp speed for everyone in our industry," said Keith Martin, a lawyer who represents solar developers. "Peak load in Virginia has increased 50% since 2018. Load in Georgia is expected to rise seventeen-fold in the next decade."

On four expert panels, speaker after speaker — developers, funders, contractors, and regulators — spoke about the enormous opportunities and challenges facing the industry. And as each challenge was presented, the Tri-Trade Solar Agreement offered a solution.

Most commonly discussed was manpower. The agreement gives developers access to a combined workforce of 1.5 million construction workers, something no nonunion hiring department could ever compete with.

Second, the tri-trade agreement promises labor peace on the job and is specific about which craft gets which work, ending jurisdictional disputes. The agreement also includes a clause allowing any of the three trades to fill an open call if the trade with jurisdiction cannot.

Ensuring that projects receive the full tax credit was the worry that kept contractors and their lawyers up at night.

The tri-trade agreement holds the answer.

"The key piece is that we have a built-in labor standards enforcement in the grievance procedure. Through these mechanisms, you ensure you are in compliance. And if you are out of compliance, you don't find out through an audit 12 months down the road; you find out while the noncompliance is happening," said Esmeralda Aguilar, an attorney for the IBEW.

Last, everyone from labor leader to investment bankers agreed that the greatest impediment is local opposition to projects, despite their promise to transform economies across the country.

Here again, the three unions were ready with a solution: 1.5 million members who call every corner of the country home.

"This agreement means that all three unions will show up at environmental hearings, siting boards, county zoning authorities, as a trusted local voice speaking up for projects and ensuring they get shovels in the ground," Cooper said. "No contractor, no hired expert can provide that for you. That's priceless."

The message of the day was summed up by Lance Dunning, vice president for Business Development at solar developer CS Energy.

"The IRA is a union deployment law," he said. "Having this [agreement] in place gives us a path to market and insulates our clients from risk."

All contractors interested in signing up to the National Tri-Trade Solar Agreement are urged to reach out to their local union business manager.

"The alternative to this agreement is the hard road," Cooper said. "We have the opportunity of a lifetime in our industry, for our union and for our nation."