Solar Reaction Mixed to Union Stance

On the surface, Hill's message could be summed up as one of mutual interest. He indicated that in order to leverage fully the potential impact of solar electricity on the nation's energy needs, the industry itself needs to embrace the IBEW and work with it in a "partnership for growth for all segments of the solar industry." In turn, the Union will commit its members, its contractors, its resources and its ideas to ensure continued long-term growth. This message fell on a sea of open but skeptical industry ears.

The necessary background to this situation is that the IBEW -- or more specifically, the local representatives of the IBEW in California -- are widely considered to be the main reason for the legislative failure of SB1, the Million Solar Roofs Initiative in California. The legislation, which originally enjoyed strong bipartisan and gubernatorial support, would have established a 10 year program of declining rebates meant to help lower the cost of solar in the state while ensuring the installation of as much as 3000 MW of solar energy.

Early in the legislative process, the bill moved swimmingly through the State Assembly. But just as final negotiations were approaching in August and September, the local IBEW representatives managed to persuade lawmakers to attach provisions to the bill requiring that all the work under the new program be done at "prevailing wages" - essentially, higher Union wages -- and that all the work require a high level, C-10, electrical worker's license. The two provisions eroded all Republican support for the bill and doomed it to failure.

SB1 Leaves a Bad Taste

"Labor dropped a bomb on us," said Dan Thompson, President of Sun Power & Geothermal Energy, and a Union member for almost two decades. Thompson did not personally hear Hill's speech, but spoke to others who had. Running his own solar installations company in California, Thompson followed the SB1 roller coaster closely.

"Once the zeros started adding up it got the unions' attention," Thompson said. "We couldn't help wonder 'where have you (unions) been the last 20 years? This is a brand new industry in their eyes and anyone looking at this from the union side is now saying, 'wow this solar really could be something.'"

There's an underlying resistance to have everything built with union labor, says Thompson, mostly because solar panels are expensive and the high union wages will drive costs up. These wages, therefore, are not something that should be coupled with rebate legislation designed to bring the cost down, he says. Thompson does believe the solar industry should find a way to work with the IBEW but stressed that sweeping demands and changes could not be made unilaterally and overnight as they were with SB1 - especially with regards to licensing. Most importantly, such a relationship should not result in higher prices for an industry already operating on such thin margins.

Mark Bettis, Senior Sales Manager, for RWE Schott Solar, a major manufacturer of solar photovoltaic modules echoed this concern, saying that "there are global forces that are increasing the cost of solar, anything that increases costs is bad for the industry."

In his speech, Hill defended the call for prevailing wages by citing Henry Ford, founder of the Ford Motor Company, who famously paid his workers $5 a day, a very high wage at the time. Ford's reasoning was that he wanted every one of his workers to be able to buy his cars.

"I want the same thing for the solar industry," Hill said. "We'll continue to support prevailing wage rates. We're not looking to pump up wages artificially. The IBEW is pragmatic; you don't survive more than 100 years by not being pragmatic. I say we begin the process of finding a common ground right now."

A Thinly Veiled Threat?

Perhaps the most ambiguous - almost foreboding -- comment in Hill's speech was his statement that he had no apologies for what happened with SB1 in California.

"His pitch about Henry Ford was well taken but Mr. Hill made himself clear: if it comes under national electrical code, then the work is for electricians," said solar industry consultant Joel Gordes. "There was also a little speck of an undertow of a threat there."

Gordes wasn't the only one who picked up on this subtlety.

Tom Dyer, Vice President of Sales and Marketing for Kyocera Solar, one of the solar industry's largest players, did not catch the speech but said he heard it characterized by others as a thinly veiled threat.

Other industry sources would only comment off-the-record but came to a similar conclusion that the "no apologies" comment from Hill signified that SB1's failure was a prime example of what happens when an industry doesn't come to an agreement with IBEW demands.

And everyone, on or off the record, agreed that the dialogue between the solar industry and the unions was poor at best.

"The Union people who were working on the issues in California refused to meet," Dyer said. "I don't know if they sincerely want to talk. I'm disappointed they didn't meet with us. We should always try to work together but up until now it has not been very productive."

To Move Ahead with a Powerful Ally?

Despite the sour taste from SB1, many conference attendees did see the speech as a conciliatory move on Hill's part and believe that if done right, a cooperative arrangement with the IBEW could be a positive one for the industry.

"Mr. Hill speaking here was a milestone," said Kenny Elliott, a Union member for 27 years and President of Eight Treasures of Kentucky. "It's significant for the PV industry because he stuck out a hand and he has a very powerful hand. If they get on board, he can help them."

Elliott, who has both an MBA and an Electrical Engineering degree, is starting up a business in the solar energy field and he plans to have a strong labor component to his business. He felt that the IBEW is well positioned to offer certification and qualified installers. He said that working without the unions won't necessarily hold solar back but that if they did partner with the IBEW, the Union could do "great things for the industry."

Scott Frazier, President of Solar Solutions, read the speech as the extending of an olive branch from the IBEW to the solar industry.

"Ed Hill said what was expected and these were not unreasonable positions," Frazier said. He added that the solar industry is in a position to be worried about cost and that it can't handle a lot of mark-up but that the prevailing wage is a valid principle. He said the right balance could probably be found.

"That's sort of the classic example of management versus labor," Frazier said. "My sense is that no one in the room begrudges the electricians that make $45 per hour but many of these solar projects are more mechanical than electrical," referring to a point that not all workers on a job site should necessarily have a high-level electrical license.

"We have mutual interests," Frazier said, referring to the Union and industry. "The spirit of the speech was 'where do we go from here' and 'let's try to make a fresh start.'"

That seemed to sum up the message at the end of Hill's speech as well: "This could be the beginning of a beautiful friendship."


Editor's note: This article attempted to capture the solar industry's disparate reactions to the uncertain relationship with the IBEW and Union issues in general. In order to further this discussion, we welcome your comments, reaction and suggestions using the reader forum that follows.