Solar Industry Shrinks in Trump’s First Year
It’s the first decline since the Solar Foundation began measuring the size of the industry in 2010.
PHOTO CREDIT: Getty Images
After years of growth, the solar industry is in contraction mode.
That's the key finding in the 2017 National Solar Jobs Census released by the Solar Foundation Wednesday. The report cited concerns over the trade case that eventually led to tariffs on imported solar panels as one possible reason for the decline.
The number of solar jobs in the U.S. decreased by almost 10,000 jobs to 250,271 total. The 3.8 percent reduction is the first decline since the foundation began the survey in 2010.
Between 2010 and 2016, the industry had nearly tripled in size, reaching 260,077 workers in 2016.
The Solar Foundation is a non-profit focused on solar energy research and education. It's funded by various organizations and the U.S. Department of Energy.
The foundation's report cites several potential causes for the decline, including a boom that occurred between 2015 and 2016. For much of 2015, it was unclear whether the solar industry's 30 percent federal investment tax credit would be extended beyond 2015. By the time the credit received congressional approval in December 2015, many large new projects were already in development as companies sought to finish major installations in case the tax credit went away. The industry added 51,000 jobs the following year.
Economic factors at the state level might also have played a role, according to the report. In California, which accounts for 40 percent of the country's solar capacity, an impending shift in residential solar rates has caused unease. The state also experienced an unusually rainy 2017.
Perhaps most notably, the report cites the uncertainty brought about by the Section 201 trade case filed by two solar companies in April 2017. Those two companies invoked a seldom-used trade law, claiming that cheap prices afforded by competitors using overseas solar manufacturers had damaged their businesses.
Industry watchers had suspected that the case's outcome would lead to the Trump administration applying tariffs on imported panels. Indeed, this past January, the White House announced 30 percent tariffs on solar panels imported from countries including China, Malaysia, and South Korea. Eighty percent of solar panels installed in the U.S. are manufactured abroad.
The foundation surveyed solar companies between October and November 2017, several months before the ruling came down. But as Inc. reported last month, solar companies had already started feeling the effects of the case's uncertainty last summer, when manufacturers began raising prices in anticipation of potential tariffs.
"If you look back historically, the biggest driver of the solar industry has been declining prices," says Ed Gilliland, senior director of the Solar Foundation and the report's author. "If the next year or two see an increase in prices, then that could slow down some of the growth of solar. So clearly, that is a concern moving forward."
In the census, 86 percent of solar companies said that trade restrictions would negatively impact their businesses. Seventy-one percent said they'd already felt negative effects from the case.
"At the same time, they did project 5 percent growth in jobs for 2018," Gilliland says. "So maybe they would have projected a higher percent without the trade case, but it wasn't total doom and gloom at the time."
Even with the downturn, the solar industry has added jobs at a rate nine times faster than the overall U.S. economy over the past five years, according to the foundation's report.
Gilliland notes that it will be up to states to counter the measures being taken at the federal level. Minnesota, for example, a state that might not immediately spring to mind when one thinks of solar energy, added 1,383 jobs last year. Gilliland says that largely is due to a recent state-wide effort to install community solar systems, to which nearby residents can then choose to subscribe.
"They're really a model for the rest of the country," Gilliland says. "The states with strong solar policies can and should be able to continue to grow."