The Solar Energy Industry Is Looking Bright

By Abigail Rome
December 17, 2009

The stars seem to be aligning with the sun these days. Or at least with an industry that takes full advantage of the sun. Here are a few indications. While the climate change agreements were being discussed last week in Copenhagen, the U.S. President spoke about stimulating green energy jobs. And, as the costs of solar panels have decreased tremendously in recent months, governments have continued to create incentives for renewable energy and efficiency. In short, the political will as well as the economics are in place for solar energy to finally skyrocket.

In his December 8th speech, reported by ABC News, President Obama called on the government to help businesses create jobs. He focused on small businesses, infrastructure and energy, citing solar energy as one of the keys towards generating jobs, growth and innovation. "With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs," Obama declared.

Studies confirm the growth of the solar energy industry

Indeed, in its potential to create jobs, solar energy is ready to hit its stride. In its 2009 study "Estimating the Jobs Impacts ofTackling Climate Change," the American Solar Energy Society (ASES) and Management Information Services, Inc. indicate that the Energy Efficiency and Renewable Energy industry could create 37 million jobs by the year 2030. While some traditional jobs will be lost, 4.5 million net jobs will result, and 487,000 of these will be for developing and installing photovoltaics and concentrating solar energy.

GreenTechMedia reports that a new study on the photovoltaic (PV) market conducted by GTM Research predicts that solar energy installations in the U.S. will grow about 50% per year over the next three years. The U.S. will experience the most rapid demand of PV markets around the world, possibly exceeding Germany, the current leader. This growth in demand will translate to a complementary increase in a variety of jobs in the solar power industry.

Solar job opportunities go beyond manufacturing and installation

Speaking of jobs of the future, West Valley College in Saratoga, CA is one step ahead of the curve. According to the San Jose Business Journal, the community college now offers a course in solar site planning to train workers to assess customers' solar needs before installation. David Esmaili, Director of the college's Advanced Transportation Technology and Energy Center, wanted his program to take a more managerial approach to solar installation than other colleges. "We've helped other community colleges and high schools develop solar installation classes, but it's a job where you get paid $15 an hour and have to climb up on roofs," Esmaili said. "There's a somewhat limited audience for that." He added that solar site planners can make from $40,000 to $50,000 a year, or more.

Governments provide the incentive

There are several reasons why the solar energy industry is predicted to grow rapidly. One is increased government incentives for renewable energy. At the federal level, there is the 2008 Emergency Economic Stabilization Act, which extended a 30% investment tax credit for solar installations for eight years, did away with the $2,000 cap for residential installations, and allowed utilities to take advantage of the credit. And in 2009, the American Recovery and Reinvestment Act of 2009 created a host of grants, tax credits and loan guarantees for manufacturing and installing solar energy equipment.

More locally, many states have instituted renewable portfolio standards (RPS) requiring electricity providers to obtain a minimum percentage of their power from renewable energy. According to the U.S. Department of Energy, 24 states and the District of Columbia now have such policies. GTM's suggestion that solar energy investments to service utility customers will grow the most quickly reflects this rise in RPS.

Costs of solar panels decreases

Another reason for the projected growth is that the price of solar panels has dropped. According to the The New York Times, they have fallen about 40% since the middle of 2008, in part because production is no longer limited by an insufficient supply of polysilicon. In addition, more panels are now available because China has jumped onto the solar bandwagon. With lower production costs and significant government support, it has become the world's largest manufacturer of solar panels.

The Indian newspaper, The Hinducites additional reasons for lowered solar energy prices. The recession has caused a decline in funding for large solar farm projects, resulting in a build-up of inventory of panels. At the same time, Chinese manufacturers have been dumping products onto the global market at very low prices because they receive large government incentives for exporting products.

Recession slowdown is temporary

The recession has, of course, caused some grief to the industry, and to its ability to provide jobs. According to Forbes, the decrease in bank financing for some solar-energy projects has reduced demand, negatively affecting companies which do solar installations. Angiolo Laviziano, chief executive of REC Solar, a large installer based in San Luis Obispo, CA, says, "The labor-intensive, job-creating part of the industry is companies like us." According to him, for every megawatt of solar electricity generated, 10 jobs are created, but for every new installed megawatt, 33 new jobs result.

Not withstanding the current decline in business, Laviziano's estimate of numbers of jobs in the solar industry provides optimism for the future. Given the above-mentioned reasons for growth in the field and the eventual recovery of the economy, the solar job market looks bright. Several recent announcements regarding increased Chinese involvement provide confirmation.

Increased investments in generation of solar energy

For instance, Duke Energy reports that the company is joining forces with the Chinese ENN Group, to develop large "utility-scale" solar farms and commercial distributed generation solar projects. And, The New York Times announced that Suntech Power, China's largest solar panel manufacturer, will open its first American plant near Phoenix, AZ. While the panels will be made in the U.S., the solar cells will be shipped in from China.

To try to sweeten the pie even more for solar manufacturers, several U.S. Senators recently introduced a bill that would give solar energy equipment manufacturers access to a cash grant program, stimulating the construction and expansion of several large solar power production facilities. The Green Tech Media article provides details. Whatever happens with this bill on Capitol Hill, it seems that more of our homes and businesses will be drinking up the sun's rays in the near future.

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