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Are Solar Industry Jobs Rising or Falling?

Bentham Paulos

Solar industry jobs boomed worldwide last year, driven by massive growth in China. US solar jobs, however, fell due to erratic policy signals.

The future of the solar industry has been a contentious topic of late, as US tariffs spur a range of conflicting predictions. The number of solar industry jobs is up worldwide, but down in the US, according to a report by the International Renewable Energy Agency (IRENA).

The global increase is driven by rapid growth in China—both in domestic solar installations and the manufacturing of solar components for export. Solar jobs fell in the US for a variety of factors, including state policies and utility procurement. It's too soon to know the total effect of a 30 percent tariff on imported panels that was enacted in January, but companies are making a number of changes to adapt.

US Declines

US solar jobs fell in 2017 to 250,000, down 9,800 from the previous year, led by a decline in installation jobs, according to the IRENA report.

Installation accounts for more than half of solar jobs in the US, the report continues, while manufacturing only accounts for 15 percent. More than 95 percent of solar panels are imported. Project development accounts for 14 percent of jobs, while sales and distribution make up 12 percent, says the report.

Utility-scale solar installations fell by 22 percent after a record year in 2016, according to IRENA, driven by expectations that a 30 percent federal tax credit might expire at the end of 2016. (It did not.)

The residential PV sector fell 16 percent from 2016, partly due to leading solar marketers focusing less on rapid growth and more on profitability, according to GTM Research. The nonresidential sector grew 28 percent, partly due to the rapid growth of community solar projects in Minnesota, GTM Research adds.

Policy uncertainties in states such as California, Massachusetts, and Nevada also had an impact. In California, by far the biggest solar market in the US, utilities are losing customers to community-choice-aggregation programs, where cities and counties buy power on behalf of their residents. As a result, utilities are hesitant to sign contracts with new solar developers, and aggregation programs are just beginning to buy solar for future needs, causing a temporary gap in procurement.

Solar industry jobs in most other states grew, including new regions like Minnesota and South Carolina, Solar Foundation spokesperson Avery Palmer told Transform.

Global Growth

Worldwide, the renewables industry added 500,000 jobs last year, surpassing the 10 million mark for the first time, according to the IRENA report. Solar jobs accounted for one-third of the total, with China dominating, thanks to world-leading manufacturing and record-breaking growth in domestic installations.

IRENA continues: China installed 53 GW of solar last year, the most ever installed in a single country, compared to 10.6 GW in the United States. China had 800,000 solar installation jobs, up 25 percent from the previous year.

China also led the world in solar manufacturing, with 1.4 million jobs. China is the solar workshop of the world, accounting (with Taiwan) for 70 percent of total production, according to the Fraunhofer Institute.

Impact of US Tariffs

The US solar industry was hit by a 30 percent tariff on imported solar panels in January 2018. The tariff steps down by 5 percent per year over four years, falling from an "average 10-cent per watt increase in year-one prices for modules, stepping down to a 4-cent per watt premium by year four," according to GTM Research.

The Solar Energy Industries Association (SEIA) estimates that tariffs will cause the loss of roughly 23,000 American jobs this year, primarily construction jobs in the utility-scale solar sector. Likewise, the Solar Foundation surveyed the industry on the tariff and found that 86 percent of respondents expected negative impacts, according to Palmer.

While it is too soon to know their full impact, there have been a range of anecdotes suggesting the tariffs could create both more jobs and fewer.

In January, Chinese company JinkoSolar announced plans to build a solar manufacturing plant in Jacksonville, Florida, according to Greentech Media. United Renewable Energy, from Taiwan, is said to be planning a new factory, as well, but no details have been announced, Greentech Media adds.

Ohio-based First Solar announced plans to open a new solar plant near its existing facility in Perrysburg, Ohio. The project would create 500 jobs, but is contingent on state and local incentive packages that are still under negotiation, according to the GTM Research report.

On the other hand, Cypress Creek Renewables cancelled 1500 MW of utility-scale solar projects, reports Greentech Media, citing the impact of the tariff. GTM Research projects the tariff could cut 7600 MW of demand over the next five years, with the worst impacts in California, Texas, and Florida.

The tariff is expected to hit utility-scale solar projects harder, since panel costs make up a larger portion of their total cost than distributed installations. GTM Research reports that utility-scale costs fell to as low as one dollar per watt last year, with about half the cost consisting of the panels themselves.

Distributed solar costs are higher, due to customer acquisition costs, permits, and other soft costs, plus greater labor per watt installed. GTM Research estimates residential solar costs were near three dollars in 2017, with panels only about fifty cents per watt. Analysts predicted the tariff would have a negligible effect on residential solar.

These numbers point to a still-oblique trend: Solar industry jobs have a sunny outlook globally, but the Trump administration's tariffs place the US on shaky ground.

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