According to job numbers released this week by The Solar Foundation (TSF), the solar industry employed just about 4 percent less people in 2017 than it did in 2016. The Solar Jobs Census found that 250,271 Americans work in solar as of 2017, representing a 3.8 percent decline, or about 9,800 fewer jobs, since 2016. This is the first year that jobs have decreased since the Solar Jobs Census was first released in 2010.
The likely cause of the loss of jobs is the solar tariff, however, it’s not the easy cause-effect that one might think, and as hard as this might be to believe, it is not Trump’s fault.
The trade case was filed by Suniva and subsequently joined by SolarWorld in May 2017, bringing with it a threat of more potential tariffs, which the industry was already dealing with (import duties were put in place in 2014 on cells and modules imported from China). In September, U.S. trade commissioners ruled that U.S. companies had been damaged and that the decision on tariffs would be made by President Trump in January. Most in the industry believed that stiff tariffs were coming.
So when Trump ruled on January 22 that the U.S. would implement a 30 percent tariff on imported cells and modules in 2018, scaling it down to 25 percent in 2019 and 20 percent in 2020, the 2017 jobs were already lost. Why? Because of the uncertainty.
When developers are planning to purchase modules for a large project, they need those prices to be as low as possible. In many cases, they have already negotiated a power purchase agreement (PPA) with an offtaker and are expecting to buy their modules at a certain price. But once the threat of tariffs is in the air, the ability to make a deal is gone. Who can purchase anything based on a “potential price?” So, they put their projects on hold and lay off the workers at the bottom of the totem pole because they know they will not be starting construction as soon as they had originally planned.
Standard Solar’s Tony Clifford agrees:
“The trade case (and the expectation of the Trump tariff that followed) was the primary factor that caused an actual decrease in the number of American solar jobs,” he said.
It is unlikely that these solar jobs will come back in 2018, or even in 2019. As Forbes contributor Joshua Rhodes pointed out, based on the way that the solar investment tax credits (ITC) are structured it is feasible that developers could “begin construction” on projects in late 2019 by doing minimal site work, and could, if they wanted, wait until 2021 to take delivery of modules. As long as their projects are placed in service by 2023, they still qualify for the full ITC. In that scenario, they would still be able to take full advantage of the ITC and also be able to purchase tariff-free panels for their projects.
On the flip side, the residential and C&I solar markets are going to be less impacted by the solar tariffs because the percentage of the total installation cost that the module price makes up is smaller. For that reason, it remains to be seen if solar jobs in the residential and C&I sector will increase or decrease in 2018 due to the solar tariffs.
Overall Solar Jobs Trend is Up
While TSF points out that 2017 was the first year that solar jobs declined since 2010, it’s important to note that the overall trend is up. The solar workforce increased by 168 percent in the past seven years, from about 93,000 jobs in 2010 to over 250,000 jobs in 2017.
Additionally, solar jobs increased in 29 states and the District of Columbia in 2017, including in many states with emerging solar markets. States with significant job gains include Utah, Minnesota, Arizona, Colorado, Pennsylvania, New Jersey, New York, and Tennessee. (See lead image, above. In the image, states in red declined in jobs; those in blue grew 1-20 percent; and those in yellow grew more than 20 percent.)
California remains the state with the largest number of solar jobs nationwide, but jobs in California decreased 14 percent in 2017. In Massachusetts, the state with the second largest solar workforce, employment decreased by 21 percent.
“After six years of rapid and steady growth, the solar industry faced headwinds that led to a dip in employment in 2017, including a slowdown in the pace of new solar installations,” said Andrea Luecke, President and Executive Director at The Solar Foundation. “Uncertainty over the outcome of the trade case also had a likely impact on solar jobs growth. At the same time, the fact that jobs went up in 29 states is an encouraging sign that solar is taking hold across the country as a low-cost, sustainable, and reliable energy source.”
Other key findings from the National Solar Jobs Census 2017 include:
Demand-side sectors (installation, sales & distribution, and project development) make up almost 78 percent of overall solar industry employment, while manufacturing makes up 15 percent. Demand-side sectors lost approximately 7,500 jobs in 2017, while manufacturing lost about 1,200 jobs.
Solar employs twice as many workers as the coal industry, almost five times as many as nuclear power, and nearly as many workers as the natural gas industry. (These comparisons with other industries are based on 2016 jobs numbers, the most recent data available for an apples-to-apples comparison.)
This year’s Census survey included approximately 59,300 phone calls and over 35,000 emails. Information was gathered from 2,389 establishments, of which 1,842 completed or substantially completed the survey. This level of sampling rigor provides a margin of error of +/- 1.25% for the national employment numbers.