Acknowledgements
The Solar Foundation® (TSF) is a national 501(c)(3) nonprofit organization whose mission is to in-
crease...
Table of Contents
1. Executive Summary
2. Overview
3. Installation
4. Manufacturing
5. Sales and Distribution
6. Pro...
Page 1
Executive Summary
The Solar Foundation’s National Solar Jobs Census 2014 is the fifth annual update of current
empl...
Page 2
This report includes up-to-date information on the solar industry, quantifying employment
growth since last year’s ...
Page 3
• The solar industry expects to add over 36,000 solar jobs over the next 12 months. If
realized, this 20.9% growth...
Page 4
and utility market segments.
The findings presented herein are based on rigorous survey efforts that include 66,986...
Page 5
Overview
The Solar Foundation’s National Solar Jobs Census 2014 is the fifth annual review of the size
and scope of...
Page 6
Table 1: 2014 Sector Employment
Solar firms added more than 31,000 jobs since Census 2013, representing 21.8% growt...
Page 7
While “Other” is a catchall category that includes various critical supporting elements of the
solar industry, it i...
Page 8
Figure 1: Solar Employment Growth From 2010-2014 (Overall and by Sector)10
Employers expect to see total employment...
Page 9
About three out of every four businesses state that the 30% Investment Tax Credit (ITC),
an income tax credit for r...
Page 10
Table 3: Solar Worker Demographic Breakdown 2013 vs. 2014
2013 2014
Women 18.7% 21.6%
Latino or Hispanic 15.6% 16....
Page 11
Installation
The installation sector represents the end of the solar value chain and is the largest sector of
the ...
Page 12
Page 13
Figure 4: Annual Solar Power Capacity Installations, 2005-2014
• Several big players in the installation sector m...
Page 14
Figure 5: Capacity-Weighted Average for Installed Costs of Solar Energy Systems, 2010-2013
This section includes a...
Page 15
Figure 6: Installation Employment Growth from 2010 to 2015 (Projected)
59.6% of solar installers work primarily on...
Page 16
Table 4: Installation Market Segments
Nationally, installers report that about half of residential systems are fin...
Page 17
While PV dominates in all markets, nearly half of all installation firms in the Southeast
work with solar water he...
Page 18
Installers were the most concerned that changes to the ITC would force job losses.
Almost every installer company ...
Page 19
Table 6: 2014 Installation Solar Worker Demographic Breakdown25
Employment
%of Installation
Employment
%of total U...
Page 20
Manufacturing
Solar manufacturers produce a variety of finished products and components for domestic
and internati...
Page 21
expected to create 350 new jobs in the community.29
o In November 2014, REC Silicon announced its plans to expand...
Page 22
• Given current trends, U.S. module manufacturing capacity could increase to more
than 3.5 GW by 2018 (compared w...
Page 23
Page 24
This section includes the key findings from the data gathered from more than 250 solar
manufacturers.
Manufacturer...
Page 25
turers are not constrained by local demand considerations, the large concentration of man-
ufacturers producing so...
Page 26
Figure 9: Solar Products Produced by Manufacturers
About half of all solar manufacturing establishments exclusivel...
Page 27
Compared with the installation sector, many fewer manufacturers expect to be impacted
by the ITC expiration.
Domes...
Page 28
About 30% of solar manufacturers sought financing over the last 12 months, seeking both
loans and equity investmen...
Page 29
Sales and Distribution
The solar sales and distribution sector is made up primarily of wholesale and retail trade
...
Page 30
o Late 2014 saw the announcement of a strategic partnership between First
Solar and Colorado-based Clean Energy C...
Page 31
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This section includes highlights from the responses of nearly 300 solar sales firms.
Solar firms primarily engaged...
Page 33
Figure 13: Difficulty Trying to Obtain Financing over Past 12 Months
Solar sales and distribution firms most typic...
Page 34
Figure 14: Solar Products Sold by Sales and Distribution Firms
Sales and distribution firms offer many opportuniti...
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Project Development
The project development sector includes companies that work on the largest, utility-scale
sola...
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Annual utility-scale installed capacity has grown by nearly 170% since 2012, while em-
ployment has grown by 89%.5...
Page 38
Figure 16: Percentage of Establishments by Portion of Solar Revenue
Nearly half of developers sought financing ove...
Page 39
Figure 17: Difficulty Trying to Obtain Financing over Past 12 Months
Not surprisingly, about half of the firms who...
Page 40
Table 12 shows the recent hires of project developers by demographic group.
Table 12: 2014 Project Developer Solar...
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Other
Entities such as research and development firms, nonprofits, government agencies, and aca-
demic research ce...
Page 42
Figure 18: Percentage Breakdown of “Other” Employment
The “other” sector declined from November 2013 to November 2...
Page 43
Figure 20: “Other” Employment Growth from September 2010 to November 2015 (Project-
ed)
12,908
5,548
8,105
11,248
...
Page 44
Workforce Development
The solar industry has added tens of thousands of jobs over the past five years in a variety...
Page 45
a very competitive solar labor market for some job seekers. Inexperienced trainees, for
example, have faced very l...
Page 46
Difficulty finding qualified employees was highest among solar installation firms, with
83% of employers reporting...
Page 47
Table 15: 2014 Average Hourly Wage by Solar Sector
The median wage for installers at utility-scale firms is approx...
Page 48
Table 17: 2014 New Solar Employees Experience and Education Requirements by Sector
Employers were also asked about...
Page 49
The infographic (on the next
page) illustrates the typical so-
lar photovoltaic installer career
pathway. The info...
Page 50
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Conclusions & Recommendations
The U.S. solar industry continues on its well-documented positive growth trajectory,...
Page 52
The industry is also becoming increasingly diverse in terms of worker gender, racial/ethnic
background, and vetera...
Page 53
Increase access to financing. Approximately two-thirds of firms in each of the installa-
tion, manufacturing, sale...
Page 54
Online portals such as the “Veteran’s Employment Center” (https://www.ebenefits.va.gov/
ebenefits/jobs), provided ...
APPENDIX: Census Methodology and Data Sources
The National Solar Jobs Census methodology is the most closely aligned with ...
The following three-phased methodology describes the survey process used to gather
employer information from both self-ide...
The final phase of the survey research was a sampling of employers in specific industries
within wholesale trade, manufact...
National Solar Jobs Census 2014 Report
National Solar Jobs Census 2014 Report
National Solar Jobs Census 2014 Report
National Solar Jobs Census 2014 Report
National Solar Jobs Census 2014 Report
National Solar Jobs Census 2014 Report
National Solar Jobs Census 2014 Report
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National Solar Jobs Census 2014 Report

The GW Solar Institute, a research partner on the National Solar Jobs Census 2014, joined The Solar Foundation and BW Research Partnership in announcing that the solar energy industry added over 31,000 new jobs in 2014. This remarkable growth rate is almost twenty times the national average and accounts for 1 out every 78 new jobs created in the US since Solar Jobs Census 2013.
Published on: Mar 3, 2016
Published in: Education      
Source: www.slideshare.net


Transcripts - National Solar Jobs Census 2014 Report

  • 1. Acknowledgements The Solar Foundation® (TSF) is a national 501(c)(3) nonprofit organization whose mission is to in- crease understanding of solar energy through strategic research that educates the public and trans- forms markets. In 2010, TSF conducted its first National Solar Jobs Census report, establishing the first credible solar jobs baseline and verifying that the solar industry is having a positive impact on the U.S. economy. Using the same rigorous, peer-reviewed methodology, TSF has conducted an an- nual Census in each of the last five years to track changes and analyze trends. TSF would like to acknowledge and thank its research partners and sponsors. Without their foresight and leadership, this report would not have been possible. Research partners include: The George Washington University Solar Institute for providing assistance and support in re- viewing and validating report results and analysis; Solar Energy Industries Association (SEIA) for use of its National Solar Database, in-kind re- search support, and peer review; U.S. Department of Energy’s SunShot program and the National Renewable Energy Laboratory (NREL). This report was developed based upon partial funding from the Alliance for Sustainable Energy, LLC, the manager and operator of NREL for the U.S. Department of Energy, and; Interstate Renewable Energy Council (IREC) for its ongoing support. Other sponsors and key contributors to this year’s Census effort include: Energy Foundation, Wil- liam and Flora Hewlett Foundation, Tilia Fund, SolarCity, SunPower, SunEdison, GTM Research/SEIA for providing survey respondents with the U.S. Solar Market Insight: 2013 YIR report, and Cornell University’s School of Industrial Labor Relations for validating the original Census methodological framework. We also want to thank all the solar employers that participated in the survey. Your responses were critical in providing us with accurate and timely data. For questions or comments about this report, please contact either: Andrea Luecke, President and Executive Director The Solar Foundation® 505 9th Street NW, Suite 800 Washington DC 20004 202-469-3750; info@solarfound.org; www.TheSolarFoundation.org Philip Jordan, Principal and Vice President BW Research Partnership 686 South Street, Unit 4, Wrentham, MA 02093 508-384-2471; pjordan@bwresearch.com; www.bwresearch.com Please cite this publication when referencing this material as “National Solar Jobs Census 2014, The Solar Foundation, available at: www.tsfcensus.org”
  • 2. Table of Contents 1. Executive Summary 2. Overview 3. Installation 4. Manufacturing 5. Sales and Distribution 6. Project Development 7. Other 8. Workforce Development 9. Conclusions & Recommendations 10. APPENDIX: Census Methodology and Data Sources
  • 3. Page 1 Executive Summary The Solar Foundation’s National Solar Jobs Census 2014 is the fifth annual update of current employment, trends, and projected growth in the U.S. solar industry. Data for Census 2014 is derived from a statistically valid sampling and comprehensive survey of 276,376 estab- lishments throughout the nation, in industries ranging from manufacturing, to construction and engineering, to sales. Rapid change in this industry has warranted annual examinations of the size and scope of the domestic solar labor force and updates on employers’ perspec- tives on job growth and future opportunities. This year’s Census found that the industry continues to exceed growth expectations, adding workers1 at a rate nearly 20 times faster than the overall economy and accounting for 1.3% of all jobs created in the U.S. over the past year. Our long-term research shows that solar industry employment has grown by 86% in the past five years, resulting in nearly 80,000 domestic living-wage jobs. The installation sector, made up of men and women placing these systems in service, crew managers or foremen, system designers and engineers, and sales representatives and site assessors, remains the single largest source of domestic em- ployment growth, more than doubling in size since 2010. With leading market analyses continuing to project record-breaking increases in annual installed solar capacity before the 30% federal investment tax credit (ITC) expires at the end of 2016, it is very likely that the national solar workforce will continue growing at its re- markable pace in the short term. However, if the ITC reverts to the 10% level in 2017, solar employment growth is likely to slow or may even experience significant job losses. As of November 2014, the solar industry employs 173,807 solar workers, representing a growth rate of 21.8% since November 2013. Since Census 2013, U.S. businesses added more than 2 million jobs, a growth rate of 1.1%, meaning employment in the solar indus- try grew nearly 20 times faster than employment in the overall economy. Over the next 12 months, employers surveyed expect to see total employment in the solar industry increase by 20.9% to 210,060 solar workers. 1 In this survey, solar employees are defined as a worker that spends at least 50% of their time on solar-relat- ed work. However, we have consistently found that 90% or more of these workers spend 100% of their time on solar-related work.
  • 4. Page 2 This report includes up-to-date information on the solar industry, quantifying employment growth since last year’s study and trends since the publication of Census 2010. These re- search findings also provide stakeholders with current information on the potential for fur- ther growth and the factors that are likely to impact the industry over the coming years. Based on the observed growth in solar employment in this and previous Census reports, we draw the following conclusions. As of November 2014: • Solar industry employment increased by nearly 22% since November 2013, which is almost twenty times the national average job growth rate. There are 173,807 solar workers in the U.S., up from 142,698 for the previous year. 2014 was the second con- secutive year in which solar employment both grew by approximately 20% or more and exceeded Census growth projections. • Employment in the U.S. solar industry increased nearly 86% over the past four years. Since the first National Solar Jobs Census was published by The Solar Foundation in Sep- tember 2010, the solar industry increased 85.9%, adding over 80,000 workers. • Solar is a major source of new U.S. jobs. Of the more than 31,000 new solar jobs added since November 2013, 85 percent are new jobs (rather than existing positions that have added solar responsibilities), representing approximately 26,600 new jobs created. • The solar industry created 1.3% of all new U.S. jobs. One out of every 78 new jobs created in the U.S. since Census 2013 was created by the solar industry – representing 1.3% of all new jobs.
  • 5. Page 3 • The solar industry expects to add over 36,000 solar jobs over the next 12 months. If realized, this 20.9% growth rate would make 2015 the third consecutive year that an- nual solar job growth was near or above twenty percent. This estimate compares with a projected 1% increase in employment in the overall economy over the next year. • Of the 173,807 solar workers in the United States, approximately 157,500 are 100% dedicated to solar activities. The “all-solar” percentage of workers is effectively un- changed since 2013. • The U.S. solar industry is becoming more efficient, to less than 15.5 jobs per megawatt of installed capacity. This is down from 19.5 jobs per megawatt in 2012. • Including indirect and induced impacts, the solar industry supports approximately 700,000 U.S. jobs. Census data include occupations critical to meeting domestic instal- lation demand. These include most of the direct jobs and many of the indirect jobs in the solar industry, with the exception of some indirect jobs in the component and materials supply chain. Those jobs, combined with induced impacts of the industry, support an additional 531,200 jobs, bringing the total employment impact for the U.S. solar indus- try to over 705,000. • Wages paid to solar workers remain competitive with similar industries and provide many living-wage opportunities. Solar installers pay an average wage of $20-24 per hour, with the mean wage for these workers rising by 1.6% over the previous year. Man- ufacturers pay their assemblers nearly $18 per hour, while internal sales people at these firms earn approximately $44 per hour. Overall, salespeople have a wide range of pay, from about $30 to more than $60 per hour, and solar designers receive between $30-40 per hour. • Solar workers are increasingly diverse. Demographic groups such as Latino/Hispanic, Asian/Pacific Islander, and African American, along with women and veterans of the U.S. Armed Forces now represent a larger percentage of the solar workforce than was observed in Census 2013. These higher percentages, coupled with overall growth in solar employment, means workers from these groups are growing in number as well as percentage of the workforce. Women account for over 37,500 solar workers – 21.6% of total – up from around 26,700 in 2013. Nearly 17,000 veterans are employed by solar establishments, compared with just over 13,000 the previous year. National Solar Jobs Census 2014 continues to demonstrate that the U.S. solar industry is having a positive and growing impact on the national economy and supports jobs across every state in the nation. As with the previous Census studies, this report includes information about all types of com- panies engaged in the analysis, research and development, production, sales, installation, and use of all solar technologies – ranging from solar photovoltaics (PV), to concentrating solar power (CSP), to solar water heating systems for the residential, commercial, industrial,
  • 6. Page 4 and utility market segments. The findings presented herein are based on rigorous survey efforts that include 66,986 tele- phone calls and over 25,655 emails to known and potential solar establishments across the United States, resulting in a maximum margin of error for employment-related questions of +/- 2.03%. Unlike economic impact models that generate employment estimates based on economic data or jobs-per-megawatt (or jobs-per-dollar) assumptions, the National Solar Jobs Cen- sus series provides statistically valid and current data gathered from actual employers. This analysis also purposefully avoids artificially inflating its results with questionable multiplier effects often found in analyses of other industries. About The Solar Foundation® The Solar Foundation® (TSF) is an independent 501(c)(3) nonprofit organization whose mis- sion is to increase understanding of solar energy through strategic research that educates the public and transforms markets. TSF is considered the premier research organization on the solar labor workforce, employer trends, and the economic impacts of solar. It has provided expert advice to leading organizations such as the National Academies, the Inter-American Development Bank, the U.S. Department of Energy, and others during a time of dynamic industry growth and policy and economic uncertainty. While TSF recognizes that solar energy is a key part of our energy future, it is committed to excellence in its aim to help people fairly and objectively gauge the value and importance of these technologies. About BW Research Partnership BW Research is widely regarded as the national leader in labor market research for emerg- ing industries and clean energy technologies. In addition to the Census series, BW Research has conducted rigorous solar installation and wind industry labor market analysis for the National Renewable Energy Laboratory, wind energy and energy retrofit studies for the Nat- ural Resources Defense Council, a series of comprehensive clean energy workforce studies for the Commonwealth of Massachusetts, Illinois,Vermont, Florida, Pennsylvania, Iowa, and California and numerous skills and gap analyses for community colleges, workforce invest- ment boards, state agencies, and nonprofit organizations. BW Research provides high-quality data and keen insight into economic and workforce issues related to renewable energy, energy efficiency, transportation, recycling, water, waste and wastewater management, and other environmental fields. The principals of the firm are committed to providing research and analysis for data-driven decision making.
  • 7. Page 5 Overview The Solar Foundation’s National Solar Jobs Census 2014 is the fifth annual review of the size and scope of the U.S. solar industry’s employment landscape, and represents the most sig- nificant analysis of solar labor market trends to date. This year’s Census survey went out to more than 55,000 U.S. business establishments and includes data gathered from more than 7,600 of them, with full survey completions from over 2,000 solar establishments. The data illustrate a rapidly growing industry that is gaining strength and efficiency while showing no signs of slowing down in the near term. Between November 2013 and November 2014, solar employment grew nearly 20 times faster than the overall economy. U.S. businesses added more than 2 million jobs since Cen- sus 2013, a growth rate of 1.1%.2 One out of every 78 new jobs created in the U.S. since Census 2013 were created by the solar industry – 1.3% of all jobs.3 Solar employment reached 173,807 jobs (at 25,491 locations) as of November 2014, an increase of 85.9% from September 2010 to November 2014. This has been driven largely by the massive growth in the demand for solar energy systems over the same time frame; rising from 929 megawatts (MW) installed in 2010 to 7,243 MW expected in 2014.4 Global demand, which drives much of domestic manufacturing, has grown from just over 17,000 MW in 2010 to an estimated 50,000 MW in 2014.5 Installation firms account for nearly 56% of all solar jobs, while manufacturing accounts for almost 19%. Collectively, demand-side sectors (installation, sales and distribution, and project development) make up 76% of overall solar industry employment. 2 Class of Worker Employment EMSI 2014.3, see methodology for further information on data sources 3 Current Employment Estimates, Bureau of Labor Statistics, for period of Nov 2013 - Oct 2014, Revised Jan 9, 2015. 4 SEIA Solar Market Insight Q3 2014 5 REN 21 Global Status Report 2014; IEA Solar Thermal Electricity Technology Roadmap 2014
  • 8. Page 6 Table 1: 2014 Sector Employment Solar firms added more than 31,000 jobs since Census 2013, representing 21.8% growth in employment from November 2013. Installers were responsible for 27,373 of these new jobs, or 88% of total growth. However, all sectors, with the exception of “Other,” grew over the past year. Table 2: 2010 – 2015 (Projected) Sector Employment6 6 Due to rounding, yearly sector employment may not sum to overall yearly total. Employment % of Total Employment Installation 97,031 55.8% Manufacturing 32,490 18.7% Sales & Distribution 20,185 11.6% Project Developers 15,112 8.7% All Other 8,989 5.2% Total 173,807 100.0% 2010 2011 2012 2013 2014 Projected 2015 Installation 43,934 48,656 57,177 69,658 97,031 118,942 Manufacturing 24,916 37,941 29,742 29,851 32,490 37,194 Sales & Distribution 11,744 13,000 16,005 19,771 20,185 25,480 Project Developers no category no category 7,988 12,169 15,112 18,004 All Other 12,908 5,548 8,105 11,248 8,989 10,439 Total 93,502 105,145 119,016 142,698 173,807 210,060
  • 9. Page 7 While “Other” is a catchall category that includes various critical supporting elements of the solar industry, it is notable that early stage investments (Seed, Series A, and Series B), from both public and private sources, are down sharply over the past several years.7 This lack of funding is likely negatively impacting employment at companies in research and develop- ment. While solar energy still represents only 1% of total US electricity generation, the solar installation sector is already larger than well-established sectors of fossil fuel generation, such as coal mining (93,185 jobs). In addition, the solar installation sector added nearly 50% more jobs in 2014 than the total created by both the oil and gas pipeline construction industry (10,529) and the crude petroleum and natural gas extraction industry (8,688).8 Solar employers’ reported projected growth of 20.8% in 2015 is nearly eight times greater than the growth expected in the oil, gas, and coal industries over the same period. More- over, the solar industry will add roughly the same number of jobs in the coming year as the much larger fossil fuel industry.9 While the growth projection of solar employers may seem overly optimistic, consider that solar employers have exceeded their predictions in each of the last two years by 2.7% and 6.2%, respectively. Since 2010, installation firms have added more than 50,000 jobs, representing more than 120% employment growth. Solar sales establishments have added 8,500 jobs while man- ufacturers have increased their payrolls by 7,500 workers, with growth rates of 72% and 30%, respectively. 7 Cleantech Group i3 data, reviewed December 19, 2014. 8 EMSI Class of Worker Employment 2014.3. Note that applying industry-wide employment change from 2012 through 2014 (8.1% decline) in coal mining to the National Mining Association’s 2012 report’s findings of 144,580 non-transportation jobs (which are excluded from this Census’ solar employment total) results in 133,870 coal mining jobs, which is 23% smaller than U.S. solar employment. 9 Id. The 21 NAICS industries that make up the oil, gas, and coal industries are projected to add 37,206 jobs over the period, up 2.7%.
  • 10. Page 8 Figure 1: Solar Employment Growth From 2010-2014 (Overall and by Sector)10 Employers expect to see total employment in the solar industry reach 210,060 solar work- ers (a 20.9% increase) by the end of 2015. This compares with only 1% employment growth projected overall in the U.S. over the same period. Solar sales firms expect the fast- est percentage growth at 26.2% (adding almost 5,300 jobs), while installation firms expect to add almost 22,000 jobs over the coming year (22.6% growth). Figure 2: Expected Solar Employment Growth From 2014-2015 (Overall and by Sector) 10 Project Developer growth is set to 2012, the first year the category was used. 85.9% 120.9% 30.4% 71.9% 89.2% -30.4% -60% -40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 2010 2011 2012 2013 2014 Overall Installation Manufacturing Sales & Distribution Project Developers Other 20.9% 14.5% 16.1% 19.1% 22.6% 26.2% 0% 10% 20% 30% Overall Manufacturing Other Project Developers Installation Sales & Distribution
  • 11. Page 9 About three out of every four businesses state that the 30% Investment Tax Credit (ITC), an income tax credit for renewable installations, has significantly helped their business. Figure 3: Perceived Effect of the ITC on Solar Businesses However, nearly 40% of all respondents believed that lowering the ITC to 10% after 2016 for commercial projects and eliminating the ITC for residential projects would not impact their workforce. This is possibly due to a large number of companies that work in sectors not eligible for the tax credit, including manufacturers, companies that primarily sell products and services abroad and companies that sell solar pool heaters (which don’t qualify for the ITC). In addition, some respondents were in states that expect to be least impacted by sched- uled changes to the ITC or are facing more pressing challenges to market growth from other policy or regulatory changes. Moreover, solar installers, which make up the largest solar sec- tor and accounted for 88% of job growth in the past year, felt the ITC was vital to their sector. The solar industry is becoming increasingly diverse. A greater percentage of women, mi- norities and veterans of the United States Armed Forces were employed by solar firms in 2014 as compared to 2013. Employers were also asked to report about their workers’ union membership for the first time since 2012. Approximately 6.2% of the solar workforce be- long to a union, totaling nearly 11,000 jobs. Significantly improved our business 72.7% Somewhat improved our business 16.4% Has not improved or has harmed our business 7.0% DK/NA 3.9% Significantly improved our business Somewhat improved our business Has not improved or has harmed our business DK/NA
  • 12. Page 10 Table 3: Solar Worker Demographic Breakdown 2013 vs. 2014 2013 2014 Women 18.7% 21.6% Latino or Hispanic 15.6% 16.3% Veterans of the U.S. Armed Forces 9.2% 9.7% Asian or Pacific Islanders 6.7% 7.0% African-American 5.9% 6.0%
  • 13. Page 11 Installation The installation sector represents the end of the solar value chain and is the largest sector of the U.S. solar industry. Nearly 9 out of 10 new solar jobs since Census 2013 were created by the installation sector. Composed of companies that primarily install photovoltaic, solar water heating, and other solar energy technologies, the installation sector’s growth is primar- ily driven by installed solar capacity gains. The installation sector is still primarily comprised of small firms – more than half of all installers have 10 or fewer employees – yet since the first National Solar Jobs Census was conducted in 2010, the number of large firms, defined as having more than 100 employees, has more than doubled to almost 10%. Solar installers employ a wide range of workers, though the majority are connected to the building trades, particularly electricians, construction laborers, and plumbers. They work on systems of all sizes, including smaller residential systems as well as large commercial and utility-scale systems. Big News in Installation: • Leading market research suggests that 2014 was a banner year for solar installations across the U.S. Over 7,200 megawatts (MW) of solar energy are expected to have been installed in 2014, enough to power nearly 1.2 million U.S. homes. If achieved, this capacity figure will represent 40% growth over the total new solar capacity installed throughout 2013.11 • Installation growth was particularly strong in certain market segments in several states, including California, North Carolina, Massachusetts, New Jersey, Arizona, Nevada, New York, and New Mexico. This continued growth in capacity, however, is seeing solar spread to new states. Georgia, for example, is expected to have installed over 100 MW of solar this past year for the first time ever, narrowly edging out Hawaii for a spot in the top 10 states for 2014. Driven by large amounts of utility-scale solar, states like Indiana, Virginia, and Tennessee will install more solar capacity this year than in all previous years combined. In addition, some major solar markets are experiencing precipitous growth in the residential market segment, with New York, Texas, and Massachusetts see- ing capacity grow by 100% or more compared with the previous year.12 11 SEIA Solar Market Insight Q3 2014 12 SEIA Solar Market Insight Q3 2014 and IREC Solar Market Trends 2013
  • 14. Page 12
  • 15. Page 13 Figure 4: Annual Solar Power Capacity Installations, 2005-2014 • Several big players in the installation sector made major announcements in 2014. In August, Verengo Solar was recognized by Inc. Magazine as one of the fastest-growing companies in the nation. Shortly thereafter, the company announced plans to expand to new markets on both coasts.13 Throughout the year, SolarCity has continued to make progress toward its goal of opening 20 new operations centers across seven states, an expansion that is expected to create 600 new jobs.14 • Growth in annual installed capacity continues to be primarily driven by the falling installed costs of solar energy. As shown in Figure 5 below, capacity-weighted average installed costs have declined by nearly 35% for residential installations, 49% for non-res- idential systems, and 61% for utility-scale projects since the beginning of 2010.15 This decline in installed costs continues to make solar more cost-competitive with conven- tional electricity generation. For utility-scale solar PV projects, a 5-year average percentage decrease of 78% was observed in the unsubsidized levelized cost of energy (LCOE), with the latest averages ranging from $0.072 - $0.086/kWh.16 13 See: “Verengo Reaches 75 MW Residential Solar Milestone”, from Energy Industry Today at: http://energy. einnews.com/pr_news/224038570/verengo-reaches-75-mw-residential-solar-milestone 14 See: “SolarCity is opening a Baltimore County operations center”, from Baltimore Business Journal at: http://www.bizjournals.com/baltimore/news/2014/09/05/solarcity-is-opening-a-baltimore-county-operations. html 15 SEIA Solar Market Insight report series, 2010-2014 16 Lazard Levelized Cost of Energy Analysis - Version 8.0 0 1000 2000 3000 4000 5000 6000 7000 8000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Megawatts Source: SEIA and GTM Research, "Solar Market Insight" report series Additional CSP Expected (Q3-Q4 2014) Concentrated Solar Power (MW-ac) Additional PV Expected (Q3-Q4 2014) Photovoltaics (MW-dc)
  • 16. Page 14 Figure 5: Capacity-Weighted Average for Installed Costs of Solar Energy Systems, 2010-2013 This section includes a summary of key findings from information gathered from nearly 1,000 U.S. solar installation companies. Installation companies now employ 97,031 workers, growing by nearly 40% since No- vember 2013 and 120% since September 2010, and now account for 56% of total indus- try employment. More Americans work at solar installation companies than work at petroleum refineries in the United States.17 The installation sector anticipates adding the most new jobs in 2015 as well, reaching nearly 120,000 jobs by year’s end with an expected employment growth rate of 22.6%. 17 EMSI Class of Worker Employment, 2014.3 $- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 InstalledPrice($/W) Source: SEIA and GTM Research, Solar Market Insight report series Residential Non-Res Utility
  • 17. Page 15 Figure 6: Installation Employment Growth from 2010 to 2015 (Projected) 59.6% of solar installers work primarily on residential systems, while another 23.6% re- port working on small to medium commercial systems up to 200 kW. There are some significant differences between these types of establishments, including that installer median wages are about 20% higher at firms that predominantly work on utili- ty-scale projects than those that install commercial or residential systems. 43,934 48,656 57,177 69,658 97,031 118,942 0 25,000 50,000 75,000 100,000 125,000 150,000 175,000 2010 2011 2012 2013 2014 2015 Employees spending at least 50% of their time on solar-related work
  • 18. Page 16 Table 4: Installation Market Segments Nationally, installers report that about half of residential systems are financed or leased through the company (as opposed to purchased outright), while about 70% of commercial systems are financed/leased as opposed to purchased. These results correspond with established trends and observations in financing for various market segments. In six states representing approximately 75% of the total capacity expected in the national residential market in 2014, third-party ownership accounts for approximately 70-90% of all new residential installations.18 Taken together, third-party owned residential systems in these states will account for nearly 60% of all residential installations projected nationwide this year. Commercial projects seem to rely more on third-party owned systems, presumably due to the comparatively greater upfront cost of these systems and the greater responsibility for sys- tem operation and maintenance that would fall onto a commercial owner-operator. For ex- ample, companies such as Walmart – the largest single corporate user of solar energy – has financed most, if not all, of these installations through third-party ownership.19 The same is true of Walgreen’s, another top corporate user of commercial solar, which recently contract- ed a developer to install, own, operate, and maintain systems on 200 of its stores. There are, of course, notable exceptions to this trend. IKEA has nearly 40 MW of solar installed on its facilities around the country, and it owns and operates each of these installations.20 While third-party ownership has driven significant growth, many installation companies are also offering zero-down loans as part of their sales strategy. Current monthly costs for ze- ro-down loans and solar leases (power purchase agreements) are strikingly similar in many markets,21 and the popularity of loan versus leased systems will be an important trend to watch in 2015. 18 SEIA Solar Market Insight Q3 2014 19 SEIA Solar Means Business Report, available at http://www.seia.org/research-resources/solar-means-busi- ness-report 20 See: “Financing Options Open Up for Commercial Solar”, from Solar Industry Magazine at http://www. solarindustrymag.com/issues/SI1401/FEAT_01_Financing-Options-Open-Up-For-Commercial-Solar.html 21 See: “Solar Leasing vs. $0-down Solar Loan – Scenarios in 10 States” from CleanTechnica at http:// cleantechnica.com/2014/02/09/solar-leasing-vs-0-solar-loan-scenarios-10-states/ Median Labor Hours for 5kW Residential PV %Pure Solar %Experienced Difficulty Obtaining Financing Average Solar Workers Hired per Firm in last 12 Months Overall 32.0 53.5% 62.3% 7.31 Residential 32.0 62.7% 64.6% 9.39 Commercial 40.0 50.6% 66.1% 4.30 Utility-Scale 24.0 50.0% 16.7% 7.79
  • 19. Page 17 While PV dominates in all markets, nearly half of all installation firms in the Southeast work with solar water heating technologies, including pool heaters. Table 5 below shows the breakdown of installer companies’ reported activities by region. Installers of solar photovoltaic systems account for most activity in all regions of the country. Solar water heating installers are more likely to be found in the Southeast, which (in the last year for which data are available) accounted for over one-third of cumulative installed solar water and pool heating in the U.S.22 Table 5: Installed Products by Region23 *Does not equal 100% as many companies work across multiple technologies. 22 SEIA Solar Market Insight 2010 Year-In-Review 23 For this analysis, the West region was split into the Northwest (Oregon, Washington, Idaho, Montana, and Alaska) and the Pacific (California, Nevada, and Hawaii) regions. Overall Northwest Pacific Southwest Midwest Southeast Mid-Atlantic Northeast Photovoltaic 92.1% 97.2% 96.3% 84.4% 94.1% 92.1% 92.0% 89.6% Water heating, which includes pool heating 28.4% 22.2% 23.2% 27.2% 22.0% 48.2% 26.8% 29.9% Concentrating solar power 5.9% 5.6% 8.3% 4.8% 2.5% 9.6% 3.6% 4.9% Other 7.5% 8.3% 5.0% 6.8% 9.3% 9.6% 9.8% 6.9%
  • 20. Page 18 Installers were the most concerned that changes to the ITC would force job losses. Almost every installer company surveyed (94%) believes the 30% ITC has significantly im- proved their business. When asked how eliminating the residential credit and reducing the commercial credit after 2016 would impact their hiring decisions, 61.7% said they would likely lay off staff and/or contractors. Such a dramatic expected decrease in employment in this sector makes sense as annual capacity additions in a given state are highly correlated with the number of solar jobs in that state (the single largest category of which are installation jobs), and that nearly every market segment in every state is expected to experience a decrease in annual installed capacity in 2017, when substantial changes to the ITC are scheduled to take effect.24 About half of all solar installer firms receive all of their income from solar goods and ser- vices. Compared with previous Census reports, this figure has grown over the past several years and demonstrates that more companies are “pure-play” solar firms as the industry continues to trend toward consolidation and maturation. Installer companies employ more African-Americans and Latinos than their counterparts in other solar sectors, and are generally more diverse than related sectors such as oil, gas, coal, and construction. In addition, 8.9% of the installation sector’s solar employment in 2014 are veterans of the U.S. armed forces, and 9.4% are members of a union. While the solar installation sector employs a higher percentage of women than the construction industry, the coal industry and the oil and gas extraction industries, there are fewer women working in the installation sector than in other solar sectors. Table 6 below includes additional information on the de- mographics of solar workers in the installation sector in 2014. 24 SEIA Solar Market Insight Q3 2014
  • 21. Page 19 Table 6: 2014 Installation Solar Worker Demographic Breakdown25 Employment %of Installation Employment %of total U.S. Workforce %of Construction Industry Employment %Oil and Gas Extraction Indus Empl. %of Coal Industry Employment Latino or Hispanic 18,821 19.4% 13.0% 16.7% 19.1% 3.0% Women 17,137 17.7% 49.6% 14.4% 16.6% 6.3% Belong to a Union 9,105 9.4% n/a n/a n/a n/a Veterans of the U.S. Armed Forces 8,649 8.9% 7.0% n/a n/a n/a African-American 6,269 6.5% 11.7% 5.3% 5.1% 2.4% Asian or Pacific Islanders 6,013 6.2% 5.2% 2.1% 2.1% 0.4% 25 See: EMSI Class of Worker 2013.4; The Employment Situation – November 2014, Bureau of Labor Statis- tics, available at: http://www.bls.gov/news.release/pdf/empsit.pdf.
  • 22. Page 20 Manufacturing Solar manufacturers produce a variety of finished products and components for domestic and international markets. From solar water heaters to photovoltaic modules, U.S. produc- tion of solar goods and services is growing, thanks to a rapidly expanding global market. Big News in Domestic Manufacturing: • An improved balance of supply and demand in global markets has benefited domestic module manufacturing. As shown in Figure 7 below, Q3 2014 saw the greatest domes- tic module production in two years, with output up over 275% since the low levels observed in mid-2012.26 Domestic production of PV components (e.g., polysilicon, cells, wafers, inverters) is also up year over year and/or quarter over quarter.27 Figure 7: U.S. Domestic Solar Module Production, 2010-2014 • 2014 saw several notable additions or announcements of new domestic manufacturing capacity. o Mission Solar Energy opened a new 100 MW cell and module facility in fall 2014 in San Antonio, Texas, which is expected to create over 400 new jobs in the area.28 o Georgia-based Suniva announced it plans to open a second U.S. manufac- turing facility in Michigan. Once fully-operational, the 200 MW facility is 26 SEIA Solar Market Insight series, 2012-2014 27 SEIA Solar Market Insight Q3 2014 28 See “Mission Solar producing solar panels” from My San Antonio at http://www.mysanantonio.com/busi- ness/local/article/Mission-Solar-producing-solar-panels-5768001.php 0 50 100 150 200 250 300 350 400 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 QuarterlyModuleProduction(MW) Source: SEIA and GTM Research, Solar Market Insight report series
  • 23. Page 21 expected to create 350 new jobs in the community.29 o In November 2014, REC Silicon announced its plans to expand polysilicon production capacity at its Moses Lake, Washington facility by 3,000 metric tons. Though not expected to be completed until late 2016, this expansion will represent a 20% increase in overall U.S. polysilicon capacity (compared with Q3 2014 figures). 30, 31 o In June of 2014, Solar City announced its acquisition of solar manufacturer Silevo and its plans to build a 1 GW module production facility in New York State. Construction began on the facility in September 2014.32 o This year also saw progress made on plans for a Wacker Chemie production facility in Charleston, Tennessee. Thus far, 200 employees have been hired to staff the facility, with an additional 450 people expected to be brought on through 2015.33 o In November 2014, First Solar announced plans to add two new produc- tion lines and hire 120 employees at its manufacturing facility in Perrysburg, Ohio.34   o Also during the fall, SolarWorld announced its plans to add a new module production line at its Oregon factory, increasing production capacity at the facility by nearly 40%. This expansion, along with the addition of 100 MW of cell production capacity, is expected to create 200 jobs in early 2015.35 29 See “New Tariffs on Chinese Solar-Panel Makers Split the US Solar Industry” from GreenTech Media at http://www.greentechmedia.com/articles/read/commerce-department-hits-chinese-panel-makers-with-high- er-tariffs 30 See “REC Silicon ExpandingPpolysilicon Production and Mulling 20,000MT JV in Saudi Arabia” from PVTech at http://www.pv-tech.org/news/rec_silicon_expanding_polysilicon_production_and_mull- ing_20000mt_jv_in_saud 31 SEIA Solar Market Insight Q3 2014 32 See “SolarCity Breaks Ground on 1GW Silveo fab in New York” from PV Tech at http://www.pv-tech.org/ news/solarcity_breaks_ground_on_1gw_silevo_fab_in_new_york 33 See “Wacker Still Looks for 2015 Start-up” from Cleveland Daily Banner at http://clevelandbanner.com/ view/full_story/25935045/article-Wacker--still-looks-for-2015-start-up?instance=yourstories 34 See “First Solar to Add 120 Workers at Perrysburg Township Plant” from The Toledo Blade at http://www. toledoblade.com/Energy/2014/11/13/First-Solar-to-add-120-employees-at-local-plant.html 35 See “SolarWorld Announces Expansions of Solar Panel and Advanced Cell production in Oregon” from SolarWorld at http://www.solarworld-usa.com/newsroom/news-releases/news/2014/solarworld-announc- es-expansions-in-oregon
  • 24. Page 22 • Given current trends, U.S. module manufacturing capacity could increase to more than 3.5 GW by 2018 (compared with 1.6 GW currently), and cell manufacturing capacity could increase to 2.0 GW (up from 0.7 GW) in the same time frame.36 Such efforts stand to benefit from additional investments aimed at manufacturing process im- provements. One example is the Smart Manufacturing Innovation Institute announced by the White House in December. This public-private partnership will seek to leverage $140 million to improve the energy efficiency of manufacturing processes in energy intensive industries, including solar cell manufacturing.37 • Unfortunately, the ongoing U.S.-China solar trade conflict created unintended con- sequences for some of the U.S. solar industry.  In December 2014, U.S. polysilicon manufacturer Hemlock Semiconductor was forced to close its Clarksville, Tennessee production facility largely due to retaliatory restraints on U.S. polysilicon exports to China.38  The new $1.2 billion dollar facility had yet to enter commercial production.  Most of the approximately 50 affected employees will have the opportunity to relocate to other Hemlock Semiconductor or Dow Corning sites.39  Hemlock Semiconductor will continue to manufacture and sell materials from its Hemlock, Michigan, site, which has been in operation for more than 53 years, and has received more than $2.5 billion of investment in the last 10 years. 36 See “SunShot Q2/Q3 ’14 Solar Industry Update (October 31, 2014)” from U.S. Department of Energy SunShot Initiative at http://ny-sun.ny.gov/-/media/NYSun/files/Meetings/2014-11-06/SunShot-Solar-Indus- try-Update.pdf 37 See: “FACT SHEET: President Obama Launches Competitions for New Manufacturing Innovation Hubs and American Apprenticeship Grants” from the White House at: http://www.whitehouse.gov/the-press-of- fice/2014/12/11/fact-sheet-president-obama-launches-competitions-new-manufacturing-innov 38 See “Hemlock Semiconductor Group Closes Tennessee Manufacturing Facility as a Result of Industry Oversupply, International Trade Disputes” from Hemlock Semiconductor at http://www.hscpoly.com/con- tent/hsc_comp/hsc-tennessee-manufacutring-facility-closure.aspx 39 Id.
  • 25. Page 23
  • 26. Page 24 This section includes the key findings from the data gathered from more than 250 solar manufacturers. Manufacturers currently employ 32,490 solar workers, equating to growth of 8.8% since November 2013 and 30% since September 2010. By way of comparison, overall manufacturing employment in the United States has grown by only 3.2% since 2010 and declined between 2013 and 2014 by 1.6%.40 Solar manufac- turers predict strong employment growth of 14.5% through the end of 2015, adding about 4,700 new jobs. Meanwhile, the overall manufacturing sector in the United States is ex- pected to shed more than 130,000 jobs, a decline of 1.1%, over the same period.41 Figure 8: Manufacturing Employment Growth from 2010 to 2015 (Projected) Manufacturers largely produce photovoltaic modules or components. Seven in ten manufacturers produce photovoltaic modules or components, while another 18.4% report producing goods related to solar water heating. This figure has been relatively consistent over the last few years, with 19.9% of manufacturing firms involved in solar water heating in 2012, and 18.8% in 2013. As shown in Table 7 below, the majority of solar manufacturers across all regions of the country produce photovoltaic modules or components, reflecting the fact that solar electric systems are currently in higher demand not only nationally, but globally. While manufac- 40 EMSI Class of Worker Employment 2014.3. 41 Id. 24,916 37,941 29,742 29,851 32,490 37,194 0 10,000 20,000 30,000 40,000 50,000 2010 2011 2012 2013 2014 2015 Employees spending at least 50% of their time on solar-related work
  • 27. Page 25 turers are not constrained by local demand considerations, the large concentration of man- ufacturers producing solar water heating equipment and components in the Southeast may be due to the fact that Florida led the nation in cumulative total solar water heating (SWH) and solar pool heating (SPH) installations in 2010 (the last year for which reliable data is available). At the time, Florida had installed 80% more SWH systems and 27% more SPH systems than California, the next largest state market for solar thermal systems.42 Table 7: Manufactured Products by Region Overall West Southwest Midwest Southeast Mid-Atlantic Northeast Photovoltaic 70.7% 74.0% 69.4% 65.2% 66.7% 87.1% 59.3% Water heating, which includes pool heating18.4% 18.2% 13.9% 17.4% 25.6% 16.1% 18.5% Concentrating solar power 8.2% 7.8% 11.1% 10.9% 5.1% 9.7% 3.7% Other 19.9% 19.5% 13.9% 26.1% 20.5% 19.4% 18.5% *Does not equal 100% as many companies work across multiple technologies. 42 SEIA Solar Market Insight 2010 Year-In-Review
  • 28. Page 26 Figure 9: Solar Products Produced by Manufacturers About half of all solar manufacturing establishments exclusively produce solar goods and services. Only one in three solar manufacturing establishments derive less than half of their revenues from solar products. As with other sectors within the solar industry, more manufacturing firms report that solar represents a majority source of revenue. This figure correlates with an increase in the number of large solar manufacturers, suggesting that solar is becoming more integrated into mainstream production by firms that offer multiple, related products rather than remaining a niche industry. This movement is similar to other production industries that have had comparable trajectories, such as organic food production, mobile software application development, and LED light bulb manufacturing. Figure 10: Company Revenues Attributable to Solar 19.9% 8.2% 18.4% 70.7% 0% 20% 40% 60% 80% 100% Other Concentrating solar power Water heating, which includes pool heating Photovoltaic 48.8% 15.2% 32.8% 3.2% 0% 20% 40% 60% 80% All of it (100%) Most but not all (50% to 99%) Less than half (1% to 49%) DK/NA
  • 29. Page 27 Compared with the installation sector, many fewer manufacturers expect to be impacted by the ITC expiration. Domestic manufacturers will likely see little impact with the expiration of the ITC because they sell the bulk of their product as components or feedstock to foreign manufacturers (e.g. polysilicon, backsheets, metal pastes) or because the products they sell are not eligible for the ITC (e.g. solar pool heaters). Moreover, a significant portion of the companies are not “pure-play” solar manufacturers, and over half of these establishments expect to not be im- pacted by the ITC decline. By comparison, firms focusing solely on solar see themselves as less likely to not be impacted by changes to the ITC, with some domestic manufacturers of heavy products for mostly domestic consumption (including module, racking, and inverter manufacturers) potentially face a more challenging market in 2017. Table 8: Solar Manufacturer Action for Anticipated ITC Decline by Amount of Firm Revenue Attributable to Solar Products Action 100% Solar 99% or less Solar Combined Results No impact 31.9% 55.6% 42.6% Expect to increase our workforce in 2017 14.9% 6.2% 10.8% Expect to lay off staff 20.2% 13.6% 17.0% Expect to lay off subcontractors 3.2% 2.5% 2.8% Expect to lay off staff and subcontractors 29.8% 22.2% 26.1% Table 9: Percent of Manufacturers that Work with Solar Products by Amount of Firm Reve- nue Attributable to Solar Products43 43 Multiple responses permitted, may sum to more than 100% Solar Products 100% Solar 99% or less Solar Photovoltaic 74.6% 67.2% Water heating, which includes pool heating 19.7% 17.2% Concentrating solar power 7.4% 9.4% Other 18.0% 21.9%
  • 30. Page 28 About 30% of solar manufacturers sought financing over the last 12 months, seeking both loans and equity investments. About one in four experienced significant difficulty obtaining financing, a trend that bears watching to ensure that lack of capital does not derail potential growth in the sector. Figure 11: Difficulty Trying to Obtain Financing over Past 12 Months The manufacturer workforce is more diverse than other segments, particularly for women, Latino/Hispanic workers, and veterans. Table 10 illustrates the 2014 demographics of solar workers in the manufacturing sector. Table 10: 2014 Manufacturing Solar Worker Demographic Breakdown44 Employment % of Installation Employment % of U.S. Workforce % of U.S. Manufacturing Industry Women 7,929 24.4% 49.6% 28.4% Latino or Hispanic 6,072 18.7% 13.0% 13.9% Veterans of the U.S. Armed Forces 3,853 11.9% 7.0% n/a Asian or Pacific Islanders 3,063 9.4% 5.2% 5.8% African-American 2,382 7.3% 11.7% 9.3% 44 See EMSI Class of Worker 2014.3; The Employment Situation – November 2014, Bureau of Labor Statis- tics, available at: http://www.bls.gov/news.release/pdf/empsit.pdf. Significant difficulty 26.7% Some difficulty 42.2% No difficulty 31.1% Significant difficulty Some difficulty No difficulty
  • 31. Page 29 Sales and Distribution The solar sales and distribution sector is made up primarily of wholesale and retail trade establishments engaged in selling (but not installing) solar and other ancillary services to customers and/or warehousing and distributing U.S. and foreign made solar goods to in- stallers. Because this report delineates companies by the activities at each business loca- tion to gather the most accurate employment information, much of the data for this section includes data from sales offices and distribution warehouses from companies across other segments of the value chain. As the industry matures and companies grow, much of this work is carried out in-house, while developing markets are likely to be more reliant on distributors – since such markets may not be sufficiently large to account for direct sales. Big News in Sales and Distribution: • 2014 saw continued federal support for firms seeking to streamline solar sales efforts, helping to reduce soft costs. Through its SunShot Incubator Program, the U.S. Depart- ment of Energy (DOE) has continued to make investments in firms with promising ideas for reducing customer acquisition soft costs, thus enabling greater efficiency in sales efforts for solar firms and lower installed costs for customers. Since fall 2013, DOE has invested nearly $6 million in a half dozen firms developing new tools to reduce custom- er acquisition costs.45 • A number of solar companies with establishments active in the sales and distribution sector announced new expansions or partnerships. o Oakland-based Sungevity is in the process of building out a new sales and service center in Kansas City, Missouri.46 Once fully staffed, the new location will employ nearly 600 workers – approximately 20% of the total number of solar jobs in the state in 2013. o This past summer, the solar crowd-funding company Mosaic announced a partnership with microinverter manufacturer Enphase aimed at offering $100 million in solar loans designed to help homeowners finance new installa- tions.47 45 See “Current SunShot Incubator Projects” from U.S. Department of Energy Office of Energy Efficiency and Renewable Energy at http://energy.gov/eere/sunshot/current-sunshot-incubator-projects 46 See “Sungevity Shines on with Office Build, Hiring Spree” from the Kansas City Business Journal at http:// www.bizjournals.com/kansascity/news/2015/01/06/sungevity-shines-on-with-office-build-hiring-spree.html 47 See “Enphase and Mosaic Join Forces in a Bid to Push Solar Loans and Supplant the Lease” from Green- Tech Media at http://www.greentechmedia.com/articles/read/how-to-take-the-risk-out-of-residential-solar- loans
  • 32. Page 30 o Late 2014 saw the announcement of a strategic partnership between First Solar and Colorado-based Clean Energy Collective to expand CEC’s efforts to develop and market utility-owned community solar projects.48 o In October 2014, the nation’s largest independent power producer, NRG Energy, acquired Pure Energies Group, which created an online and tele- phone-based solar customer acquisition platform. The acquisition, along with other recent acquisitions by NRG Energy, position it as potentially one of the nation’s largest vertically integrated solar company featuring sales, financing, and installation services.49 These types of acquisitions illustrate the growing trend that many sales and distribution establishments are offices or subsidiar- ies of firms that belong to other sectors (e.g., most of NRG Energy’s establish- ments focus on project development). o EnergySage, based in Cambridge, Massachusetts, announced several new partnerships in 2014. East Coast Petroleum, Staples, Walgreens, World Wild- life Fund, and many local chambers of commerce and cities have partnered with EnergySage in the last year to provide their employees, customers, and other constituents with a central marketplace for receiving and comparing price estimates from multiple solar installers at the same time.50 48 See “First Solar takes stake in Louisville-based Clean Energy Collective” from The Denver Post at http:// www.denverpost.com/business/ci_27104211/first-solar-takes-stake-louisville-based-clean-energy 49 See “NRG Acquires Pure Energies to Lower the Cost of Winning Solar Customers” from GreenTech Media at http://www.greentechmedia.com/articles/read/NRG-Acquires-Pure-Energies-to-Lower-the-Cost-of-Win- ning-Solar-Customers 50 See “News/Press” page from EnergySage at https://www.energysage.com/news
  • 33. Page 31
  • 34. Page 32 This section includes highlights from the responses of nearly 300 solar sales firms. Solar firms primarily engaged in sales and distribution currently employ 20,185 solar workers, an increase of 72% since September 2010. By comparison, the national wholesale and retail trade sectors grew by a rate less than 1/10th of the solar sales and distribution sector, showing just over 6% growth over the same peri- od.51 However, solar sales firms posted the weakest growth of any solar sector at 2.1% over the past 12 months, though this is still three times the growth expected in the national retail and wholesale sectors over the same period.52 Figure 12: Sales and Distribution Employment Growth from 2010 to 2015 (Projected) Employers are optimistic, expecting gains of 26.2% (5,295) through 2015, the fastest growth rate of any sector. About one in three sales and distribution firms applied for financing and nearly two-thirds of those had at least some difficulty obtaining financing (with 20.5% experiencing signif- icant difficulty). 51 EMSI Class of Worker Employment 2014.3 52 Id. 11,744 13,000 16,005 19,771 20,185 25,480 0 10,000 20,000 30,000 40,000 2010 2011 2012 2013 2014 2015 Employees spending at least 50% of their time on solar-related work
  • 35. Page 33 Figure 13: Difficulty Trying to Obtain Financing over Past 12 Months Solar sales and distribution firms most typically pursued loans or other debt financing when seeking capital over the past year. It will be important to determine whether and to what extent lack of capital is to blame for the weaker performance of the solar sales sector, and whether policies or incentives could help free capital for these businesses. Alternatively, it is likely that solar is comprising a larger share of business for existing distributors. Thus, despite demand for solar products growing in the last year, increasing efficiency and labor productivity among these established businesses may have been largely sufficient to meet the higher volume of sales. Fewer sales and distribution firms indicated that they fully understand the Investment Tax Credit and the impact it has on their business. Perhaps as a result, the majority believe that it will not harm their business prospects. A growing number of sales and distribution firms are working with solar water heating prod- ucts (though the percentage of the total is declining as the number of PV firms is growing at an even faster rate). Currently, about one quarter (27.2%) of solar sales and distribution firms work with solar water heating products, while the overwhelming majority work with photovoltaics. Significant difficulty 20.5% Some difficulty 45.5% No difficulty 34.1% Significant difficulty Some difficulty No difficulty
  • 36. Page 34 Figure 14: Solar Products Sold by Sales and Distribution Firms Sales and distribution firms offer many opportunities for women, but are less diverse than other sectors of the solar industry. Table 11 demonstrates the demographic breakdown of the solar sales workers over the past year. Table 11: 2014 Sales and Distribution Solar Worker Demographic Breakdown53 Employment % of Installation Employment % of U.S. Workforce % U.S. Wholesale Trade Industry Women 4,850 24.0% 49.6% 30.5% Veterans of the U.S. Armed Forces 1,525 7.6% 7.0% n/a Latino or Hispanic 1,385 6.9% 13.0% 12.9% Asian or Pacific Islanders 1,352 6.7% 5.2% 5.6% African-American 682 3.4% 11.7% 6.9% 53 See EMSI Class of Worker 2014.3; The Employment Situation – November 2014, Bureau of Labor Statis- tics, available at: http://www.bls.gov/news.release/pdf/empsit.pdf. 16.9% 6.2% 27.2% 71.0% 0% 20% 40% 60% 80% 100% Other Concentrating solar power Water heating, which includes pool heating Photovoltaic
  • 37. Page 35 Project Development The project development sector includes companies that work on the largest, utility-scale solar projects. Predominantly using photovoltaic or thermal electric generation (concentrat- ing solar power or CSP), these facilities generate and sell bulk power to utilities or directly to consumers as part of the electricity grid system. Project developers and utilities require a wider range of workers and contractors, including civil engineers, land surveyors, and power plant operators. Permitting, finance, and land ac- quisition is more complex, requiring more administrative and professional workers as well. Employers in the sector tend to be larger and highly efficient with specialized labor for each component of the project. Big News in Project Development • By the end of 2014, the U.S. is expected to install a record-high 4,900 MW of utili- ty-scale solar capacity (including both PV and CSP), approximately 50% more than was installed in the previous year.54 • A number of noteworthy utility-scale solar projects came online in 2014. Near the start of the year, BrightSource’s Ivanpah Solar Electric Generating System – a 392 MW con- centrating solar power plant – came online, with the capacity to provide enough solar electricity to power 140,000 average U.S. homes.55 Also this year, First Solar’s Topaz Solar Farm, currently the largest solar project in the world at 550 MW, began producing electricity.56 • Drivers of this growth include the sharp decline in installed costs observed since 2010, the value of solar in providing a hedge against fuel price volatility (possible with compet- ing conventional technologies), the use of solar energy to replace retired coal capacity, and the desire of some utilities to “front load” large projects in their RPS compliance timeline to ensure these facilities will be completed in time to benefit from the 30% ITC.57 • The short-term outlook for utility-scale installations remains healthy, with still greater levels of annual installed capacity expected in this market segment in 2015 and 2016. These projections are in line with employers’ expectations of continued employment growth over the next few months. However, a reduction in the federal ITC to 10% at the end of 2016 can be expected to result in 2017 annual capacity additions that are over 80% lower than those expected in 2016, leading to a large contraction in employment in this sector.58 54 SEIA Solar Market Insight Q3 2014 55 See “What You Should Know: The 7 Notable Solar Power Plants of 2014” from Forbes at http://www. forbes.com/sites/uciliawang/2014/12/31/what-you-should-know-the-7-notable-solar-power-plants-of-2014/. 56 Id. 57 SEIA Solar Market Insight Q3 2014 58 Id.
  • 38. Page 36
  • 39. Page 37 Annual utility-scale installed capacity has grown by nearly 170% since 2012, while em- ployment has grown by 89%.59 At the same time, these installations represent 63% of solar capacity added over the same period,60 yet due to the efficiencies of scale associated with these larger systems as well as increased labor efficiency,61 only 13% of all new jobs since November 2012 were created in this sector. This section includes the key findings from nearly 200 project developers and utilities. Project development is one of the fastest growing solar sectors, gaining nearly 3,000 jobs to total 15,112 solar workers, a growth rate of 24.2% from November 2013 to November 2014. Developers expect to add approximately 3,000 more solar jobs over the coming 12 months, at a growth rate of 19.1%. Figure 15: Project Developer Employment Growth from 2012 to 2015 (Projected)62 Developers are more likely to be “pure-play” solar firms, with over half receiving all of their revenue from solar. This is logical given the large size of the projects they work on; however, about one in four receives less than half of their revenue from solar projects. 59 Id. 60 Id. 61 In 2014, employers reported that 74.3% of the installation workforce spends a majority of their time on installing systems, nearly double the amount reported in 2013 of 37.5%. 62 2012 was the first year that project developers were counted as a separate category. 7,988 12,169 15,112 18,004 0 10,000 20,000 30,000 2012 2013 2014 2015 Employees spending at least 50% of their time on solar-related work
  • 40. Page 38 Figure 16: Percentage of Establishments by Portion of Solar Revenue Nearly half of developers sought financing over the last year (48.3%), and over two-thirds (66.7%) had difficulty obtaining it, with one in five reporting significant difficulty. Employers’ stated difficulties in obtaining financing may be a reflection of the limited fi- nancing options available to solar developers, forcing them to continue to pursue existing financing mechanisms with higher costs of capital than would be available with greater alternatives. Significant work has been done by numerous organizations on the prospect of financing alternatives to “traditional” tax equity partnerships, such as Master Limited Part- nerships, Solar Real Estate Investment Trusts, and “yieldcos.”63 Nevertheless, broad adoption of any of these or other financing arrangements among developers and lenders does not yet appear to have occurred. Continued reliance on tax equity partnerships may result in unrealized development without an increase in the tax appetite of lenders, particularly as developers rush to begin projects before the expiration of the ITC. 63 See: “Master Limited Partnerships and Real Estate Investment Trusts: Opportunities and Potential Compli- cations for Renewable Energy” from the National Renewable Energy Laboratory at http://www.nrel.gov/docs/ fy14osti/60413.pdf and “Solar YieldCos: Proven Concept or Hype?” from GreenTech Media at http://www. greentechmedia.com/articles/read/solar-yieldcos-proven-concept-or-hype, among others. 55.0% 18.9% 23.3% 2.8% 0% 20% 40% 60% 80% All of it (100%) Most but not all (50% to 99%) Less than half (1% to 49%) DK/NA
  • 41. Page 39 Figure 17: Difficulty Trying to Obtain Financing over Past 12 Months Not surprisingly, about half of the firms who sought financing looked for project fi- nance, which is most typically a combination of debt and equity. Nearly 60% of developers expect to lay off workers if the ITC is reduced as planned. Again, this significant reduction in employment is likely tied to the fact that project eco- nomics for utility-scale solar installations stand to be impacted the greatest by reduc- tions in the ITC. With industry analysts projecting an 80% decline in these installations in 2017 (when the commercial ITC is scheduled to decrease to 10% and some major utilities are expected to have mostly fulfilled their renewable portfolio standard targets), it should come as no surprise that employment in this sector will also be affected dra- matically.64 Project developers employ a large proportion of women and veterans, but solar work- ers are less racially and ethnically diverse in this sector than in other solar sectors. 64 SEIA Solar Market Insight Q3 2014 Significant difficulty 19.2% Some difficulty 47.4% No difficulty 33.3% Significant difficulty Some difficulty No difficulty
  • 42. Page 40 Table 12 shows the recent hires of project developers by demographic group. Table 12: 2014 Project Developer Solar Worker Demographic Breakdown65 65 See EMSI Class of Worker 2014.3; The Employment Situation – November 2014, Bureau of Labor Statis- tics, available at: http://www.bls.gov/news.release/pdf/empsit.pdf. Employment % of Installation Employment % of U.S. Workforce % of Utility System Construction Industry Women 3,657 24.2% 49.6% 11.2% Veterans of the U.S. Armed Forces 1,932 12.8% 7.0% n/a Latino or Hispanic 1,283 8.5% 13.0% 18.0% Asian or Pacific Islanders 1,130 7.5% 5.2% 1.4% African-American 699 4.6% 11.7% 5.8%
  • 43. Page 41 Other Entities such as research and development firms, nonprofits, government agencies, and aca- demic research centers play a small but important role in the U.S. solar industry. Big News in the “Other” Sector: • The U.S. solar industry has continued to expand its efforts to create and employ new forms of project financing. 2014 saw the creation of a number of “yieldco” structures designed to provide investors with an attractive investment opportunity and companies with a means of financing new projects with cheaper capital. Based on the success of the half dozen or so yieldcos created to date, some analysts are predicting the creation of several more in the coming year.66 The last year has seen companies take further steps toward large scale securitization67 of solar assets and the first-ever registered offering of “solar bonds” to public investors.68 In addition, more lending institutions – whether in partnership with solar companies or independently69 – have been offering new financial products for solar or have increased the amount they are willing to finance through ex- isting financing options (including home equity lines of credit, which have become an option for more homeowners since the housing market has improved). • Early-stage investment in pre-commercial firms rose sharply through 2011, but has since fallen to pre-2007 levels. Private investment at the early stages (Seed, Series A, and Series B) has dropped most significantly.70 While there are many potential reasons for this decline, such as high-profile bankruptcies and declines in traditional PV, the need for innovation in the long-term is unchanged. About 5.2% of the solar workforce, or 8,989 workers, are engaged in other solar activities such as research and development, nonprofit advocacy, academic research, or government oversight. 66 See “Deutsche Bank expects more publicly traded PV-based yield cos” from PVTech at http://www.pv- tech.org/news/deutsche_bank_expects_more_publicly_traded_pv_based_yield_cos 67 See “Debt Financing Tied to Solar Project Pools Will Spur Growth for Residential Developers” from Gre- enTech Media at http://www.greentechmedia.com/articles/read/Debt-Financing-Tied-to-Solar-Project-Pools- Will-Spur-Growth-For-Residential 68 See “SolarCity Starts Selling ‘Solar Bonds’ Online to Public Investors” from GreenTech Media at http:// www.greentechmedia.com/articles/read/SolarCity-Innovates-Again-With-a-Public-Offering-of-Solar-Bonds 69 See “Admirals Bank and SunPower Partnership Announces $200 Million Loan Funding Program for Residential Solar Systems” from Admirals Bank at http://www.admiralsbank.com/news/press-releases/admi- rals-bank-and-sunpower-finance-home-solar-systems 70 Cleantech Group’s i3 data.
  • 44. Page 42 Figure 18: Percentage Breakdown of “Other” Employment The “other” sector declined from November 2013 to November 2014 and has declined by more than 30% since September 2010. Figure 19: Percentage Breakdown of “All Other” Establishments *In the chart above, “other” includes any activities that had two or fewer responses in the survey. Nonprofit 8.8% Government 11.5% Academic 3.5% Other (Including R&D) 76.3% Nonprofit Government Academic Other (Including R&D) 24.6% 2.8% 5.6% 8.3% 8.7% 12.3% 15.1% 22.6% 0% 10% 20% 30% 40% Other Software Law Research, development and testing Marketing, media and communications Architecture, engineering and design Consulting Investment, finance and insurance
  • 45. Page 43 Figure 20: “Other” Employment Growth from September 2010 to November 2015 (Project- ed) 12,908 5,548 8,105 11,248 8,989 10,439 0 10,000 20,000 2010 2011 2012 2013 2014 2015 Employees spending at least 50% of their time on solar-related work Some of this contraction can be attributed to declines in research and development (evident from declining public and private research investments), while a large portion is due to the maturation of the industry. As more “pure play” solar firms proliferate, many of the ancillary support functions previously provided by “other” firms are now being brought in-house. Two areas that seem to be growing are project and bank financing and international consult- ing. This may be fueling the sector’s anticipated 16% growth over the coming year. Women account for more than 40% of solar workers among these “other” solar firms. Veterans also make up a greater share of employment in the “other” category as compared to the overall industry, though Latino, Asian and Pacific Islander, and African-American em- ployment is lower than average, as seen in Table 13 below. Table 13: 2014 “Other” Solar Worker Demographic Breakdown71 71 See EMSI Class of Worker 2014.3; The Employment Situation – November 2014, Bureau of Labor Statis- tics, available at: http://www.bls.gov/news.release/pdf/empsit.pdf. Employment % of Installation Employment % of U.S. Workforce Women 3,928 43.7% 49.6% Veterans of the U.S. Armed Forces 966 10.7% 7.0% Latino or Hispanic 848 9.4% 13.0% Asian or Pacific Islanders 622 6.9% 5.2% African-American 477 5.3% 11.7%
  • 46. Page 44 Workforce Development The solar industry has added tens of thousands of jobs over the past five years in a variety of occupational categories including engineering, sales, production, and, most abundantly, the construction trades. This growth has occurred during a time of slow economic recov- ery in the United States, as other industries have struggled to add jobs. With historically high unemployment rates – particularly in the trades – following the economic recession, solar employers had little difficulty finding qualified applicants with abundant related ex- perience in their fields. In fact, 2010 (the year of the first National Solar Jobs Census) was the worst year for employment across five related, traditional occupations: electricians, plumbers, HVAC technicians, electrical equipment assemblers, and technical and scientif- ic product sales representatives. Electricians, which are particularly valuable to solar installation firms, were hit hard. Between 2007 and 2010, almost 19% of electricians (about 136,000) across the United States lost their jobs. Since 2010, about 40,000 of these jobs have been recovered, but there are still 93,000 fewer electrician jobs today than there were in 2007. Figure 20: Comparison Occupational Employment 2007-2015 These statistics illustrate the key role that the solar industry has played in providing em- ployment for many of the hardest hit occupations and a road to recovery for thousands who were out of work. At the same time, the surplus of experienced workers made for - 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 Electricians Plumbers, Pipefitters, and Steamfitters Sales Representatives, Wholesale and Manufacturing, Technical and Scientific Products Heating, Air Conditioning, and Refrigeration Mechanics and Installers Electrical and Electronic Equipment Assemblers
  • 47. Page 45 a very competitive solar labor market for some job seekers. Inexperienced trainees, for example, have faced very long odds when competing against applicants with licensure, experience, and a solid track record in related industries. The tide is slowly turning and much of the slack of the construction-trade and broader so- lar labor market is being quickly absorbed. As this trend accelerates, there will be fewer experienced candidates available, and employers will be more likely to turn to education and training (both on-the-job and with outside training providers) to meet their needs for a skilled workforce. Two key metrics for understanding the supply and demand of the workforce are employers’ reported difficulties in finding qualified workers and the wages paid to employees in different industry sectors, both of which are reviewed in detail in this section. Difficulty Hiring One of the most important metrics for understanding potential gaps and surpluses in the labor market is employers’ reported difficulty in hiring. Overall, solar employers report increasing difficulty in finding qualified workers as compared to previous Census reports, though it is not yet to a critical level. Nearly one in four solar employers overall report that they have no difficulty finding the employees they need, and about one in six report that it is very difficult to find qualified employees. Figure 21: Difficulty finding solar employees over the last 12 months 17.2% 14.5% 12.5% 20.0% 13.5% 19.4% 59.8% 58.7% 59.8% 49.6% 58.9% 63.3% 23.0% 26.1% 27.7% 30.4% 27.7% 17.2% 0.1% 0.7% 0.0% 0.0% 0.0% 0% 20% 40% 60% 80% 100% Overall All Other Project Developers Sales & Distribution Manufacturing Installation Very difficult Somewhat difficult Not at all difficult DK/NA
  • 48. Page 46 Difficulty finding qualified employees was highest among solar installation firms, with 83% of employers reporting at least some difficulty (63% somewhat difficult and 19% very difficult). Of the installation firms having difficulty, one-third reported that it is most difficult to find electricians with solar expertise (33%), solar installers (29%), finance staff (19%), and software engineers (18%). The most frequently cited reasons for the difficulty are lack of appropriate skills (24%), competition with other firms (21%), and general lack of qualifications in the workforce (21%). Employers in the Pacific Region note the greatest difficulty finding workers, followed close- ly by the Northeast and Southeast. Table 14: Difficulty finding solar employees by region. Manufacturers and project developers note great difficulty finding engineers (non-electri- cal), while sales firms most frequently cite issues with hiring salespeople. Lack of relevant skills and experience are the most frequently cited reasons for these difficulties. Wages In addition to the trends for employer-reported hiring difficulties, changes in wages paid offer insight into supply and demand as wages rise in response to the scarcity of talent. Wages for installers have risen slightly since 2013, with the mean rising $0.38 per hour (a 1.6% increase). At the same time, wages for production/assembly workers fell $0.63, a decline of 3.5%. For the first time, this year’s Census survey asked firms about their average pay for solar designers and salespeople. Solar designers earn $30-40 per hour on average, while sales- people have a wider range of pay, from about $30 to more than $60 per hour. From a sector standpoint, developers and utilities pay the highest wages to sales staff, followed by manufacturers, sales firms, and installers.
  • 49. Page 47 Table 15: 2014 Average Hourly Wage by Solar Sector The median wage for installers at utility-scale firms is approximately 20% higher than at firms working on commercial or residential scale projects. There are several other key dif- ferences, noted in the table below. Table 16: 2014 Difficulty Hiring, Use of On-the-Job Training, and Views on the Importance of Credentials by Solar Installation Sectors Workforce Profiles Solar employers were asked to provide information regarding the background of their hires over the last 12 months in order to determine how many had previous experience related to the position or college degrees. More than two-thirds of all solar workers hired over the last 12 months had previous experience, but only 27.3% have at least an associate’s de- gree. This is quite low when compared to other fast-growing industries. Previous experience is most important for developers and installers, and less so for manu- facturers and salespeople. These groups differ dramatically in terms of education require- ments, however, as more than 70% of new hires at developer/utilities had a bachelor’s degree, compared to only 10.9% of those hired by installers.
  • 50. Page 48 Table 17: 2014 New Solar Employees Experience and Education Requirements by Sector Employers were also asked about the value they place on technical credentials, such as the North American Board of Certified Energy Practitioners (NABCEP) and Underwriters Laboratories (UL), as well as training program accreditation from the Interstate Renewable Energy Council (IREC). Credentials have more value to installers and developers, while manufacturers and sales firms place less importance on them during the hiring process. Some employers remain somewhat skeptical about the importance of such credentials, but over 50% of respondents indicated that they think credentials either “definitely” or “prob- ably” help them find higher-quality employees. Both credentialing bodies and the industry should continue to work together to recognize and demonstrate the value of credentials in hiring practices and workforce training programs. About three quarters of all solar firms offer formal on-the-job training to supplement the skills of their workers. Figure 22: Use of On-the-Job Training by Solar Sector 85.1% 80.0% 74.3% 63.8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Installation Manufacturing Sales Developers % Offering OJT
  • 51. Page 49 The infographic (on the next page) illustrates the typical so- lar photovoltaic installer career pathway. The information is drawn from Monster Govern- ment Solutions and PayScale data and reviews the most frequently reported occupation, wage, edu- cation, and skill data for photo- voltaic installers. The data also include the most prevalently held occupations prior to becoming a solar installer (within five years), as well as the most typical five year progressions. A distinct career progression has yet to form for photovoltaic installers. A large number of PV installers worked previously in higher wage positions in the past five years. Given the high un- employment in the construction industry five years ago, it is likely that the solar industry has helped to reemploy laid-off tradespeo- ple such as roofers, construction managers and foremen, and other laborers. The data clearly indi- cate that, at least in the short- term, experience in the construc- tion industry is a must for solar installers.
  • 52. Page 50
  • 53. Page 51 Conclusions & Recommendations The U.S. solar industry continues on its well-documented positive growth trajectory, post- ing 22% employment growth from November 2013 to November 2014, and 86% job growth since September 2010. Firms across the entire value chain of solar goods and ser- vices have noted significant employment gains, though none more so than the installation sector, driven by the historic increases in installed solar capacity across the country. Giv- en the relationship between installed capacity and employment growth, the next couple of years – when annual installed capacity is expected to be 18% (2015) and 69% (2016) greater than that coming on-line in 2014 – will surely see this upward growth trend con- tinue in the short term. Though employers remain optimistic about near-term growth – anticipating 20.9% job growth when employment in the national economy is expected to increase by only 1% - results and trends from the Census series reveal challenges and opportunities for future growth. The greatest looming threat for continued employment growth is the expiration of the 30% federal Investment Tax Credit (ITC) at the end of 2016. With this policy in place, approximately half of all employers have reported job growth in each of the last several years, with only a few (typically 2-3% of all firms) experiencing declines in employment. In Census 2014, only less than 40% of solar employers stated reductions in the ITC would not impact their workforce. Installation and project development firms – which together employ nearly two-thirds of the entire solar workforce – stand to be affected the greatest, with 62% of installation firms and 60% of project developers expecting to shed workers once the current ITC expires. Even as employment continues to grow in the next two years, improvements in labor efficiency (the amount of capacity installed by each worker) may start reducing the rate at which new solar workers are added. In 2012, the U.S. solar industry required about 19.5 workers per installed megawatt. This number dropped sharply in 2013 to 16 jobs per megawatt, and continued to decline by about a half of a worker to 15.5. On the bright side, solar jobs are becoming increasingly available to workers of differing backgrounds. Overall, the solar industry places greater emphasis on previous related ex- perience (which two-thirds of new hires in 2014 possessed) than on education (with only 21% of new workers holding a bachelor’s degree or higher and less than 6% having an associate’s degree or credential). Though certain sectors are more likely to require employ- ees with higher education (such as project development), firms in every sector still place greater weight on experience over education. In the installation sector, nearly 70% of new hires had some form of previous experience, whereas less than 14% had some form of higher education, suggesting these jobs – which constitute the bulk of total solar employ- ment – may be filled by workers with little or no formal higher education.
  • 54. Page 52 The industry is also becoming increasingly diverse in terms of worker gender, racial/ethnic background, and veteran status. In 2014, each of these demographics represented a larger proportion of the solar workforce than in the previous year, indicating more members of these groups are seeking employment in the solar industry, and that these jobs are becom- ing more available to them. Analysis of industry trends across the entire Census series indicates that the observed solar employment growth has not come without some growing pains. As the national employ- ment situation continues to improve and electricians, roofers, and workers in other trades related to solar find work in their respective industries, this pool of qualified workers will become less available to the solar industry. This phenomenon may already be impacting industry growth. Over three-quarters of solar employers experience at least some difficulty in finding the employees they seek, with about one in six reporting it has been very diffi- cult to find qualified workers. An increase in demand for qualified workers relative to supply can be expected to com- pel employers to offer higher wages in order to attract the talent they seek, as seen in the 1.6% increase in average wages for installers (the sector reporting the greatest difficulty in finding new workers) over the previous year. While welcome news for solar workers, rising wages could also drive up labor installation costs, which constitute the single largest category of solar soft costs. One obvious way to limit the impact of rising wages is by increasing the supply of quali- fied workers through education, training, and apprenticeship. Given the stark differences among employers in their reporting regarding the use of on-the-job training, third-party training, and credentials, it is becoming clearer that the solar industry is one that is search- ing for a consistent framework for training and evaluating talent. This may become a prob- lem quickly as the growth of the industry accelerates. Based on these conclusions, we make the following recommendations: Promote stability in federal policy. The U.S. solar industry continues to demonstrate its strength across most of the value chain. Although this may change as labor efficiencies improve, there is currently a very strong link between solar adoption and job creation. As has been the case with every domestic energy industry in our nation’s history, the solar industry continues to benefit from policies and incentives that accelerate growth and help bring the industry to scale, particularly those policies with the multiyear certainty needed to leverage project financing. In Census 2012, employers cited federal tax incentives for solar investment as one of the top three drivers of industry and employment growth. Simi- larly in Census 2014, three out four employers reported that the ITC had helped their busi- ness. Given the importance of such policies to the deployment of solar technology, it is not unreasonable to expect that the continuation of demand-side incentives will continue to have a strong, positive impact on job creation and competitiveness. Given the incredi ble history of job creation by the solar industry over the last several years, there seems little reason to change the status quo at the federal level.
  • 55. Page 53 Increase access to financing. Approximately two-thirds of firms in each of the installa- tion, manufacturing, sales and distribution, and project development sectors experienced difficulty in obtaining financing. These difficulties are likely a reflection of the limited financing options available to solar companies, forcing them to continue to pursue existing financing mechanisms with higher costs of capital than would be available with some al- ternatives. For installation and project development firms, an increased ability to leverage promising financing arrangements such as Master Limited Partnerships, Solar Real Estate Investment Trusts, yieldcos, and securitization of solar assets may help alleviate this prob- lem. While access to capital is important for solar companies, it is also key for consumers. Increasing the number and availability of solar financing options for home and business owners will help further drive solar adoption, in turn leading to increased solar employ- ment. Though the solar industry has continually proven its ability to develop and offer innovative financing solutions, there remain many key un(der)addressed markets. As one example, consider that the solar boom has not spread uniformly across the spectrum of household incomes because, unlike many more affluent families, lower-income house- holds face a number of inherent barriers to going solar. These barriers include being less likely to own their roof, having limited access to affordable financing, being more likely to live in buildings with deferred maintenance, and being unable to realize the financial benefits of fuel-free electricity because their utility bills are partially or fully subsidized. Finding ways to serve the low-income markets is essential for the solar industry to expand beyond its current market of relatively affluent early technology adopters. At the same time, many of the more affluent households in the U.S. are aging, and less likely to remain in their homes for the number of years that may be required for full-payback of their sys- tems. Programs that allow loans to follow the home rather than the owner (such as prop- erty assessed clean energy, or PACE) could unlock this untapped potential. Continue to develop bridge programs for veterans. Veterans of the U.S. Armed Forces continue to represent a larger proportion of the solar workforce as compared to the over- all economy. This strong representation may be driven in part by a high degree of skill transferability between military occupations and solar jobs, which has been supported by interviews with select solar employers conducted for the 2014 report Veterans in Solar: Securing America’s Energy Future, co-authored by The Solar Foundation and the Truman National Security Project. Despite this potential skills overlap, some groups of veterans – especially those in the 18 to 24 age group – continue to grapple with high unemploy- ment. A deeper understanding of the skills developed in military occupations – especially non-technical workplace skills that are in high demand in the solar industry – can help these former service members transition into jobs in the solar industry. Workforce training providers are aware of this opportunity but need greater support to further develop the solar industry as a strong employer of military veterans. In addition, workforce training providers and solar employers should become more famil- iar with the Post-9/11 GI Bill and the education and training opportunities it provides.
  • 56. Page 54 Online portals such as the “Veteran’s Employment Center” (https://www.ebenefits.va.gov/ ebenefits/jobs), provided by the Department of Veterans Affairs and the Department of Defense, as well as “America’s Job Centers” run by the Department of Labor (http://www. servicelocator.org/onestopcenters.asp), can help employers identify and connect with veterans seeking employment. Finally, The Solar Foundation encourages industry to partici- pate in the White House’s Joining Forces initiative and publically commit to hiring increas- ing numbers of veterans. Support worker evaluation efforts and the development of comprehensive assessment tools. As the supply and demand balance for qualified workers continues to shift, the industry will have a growing need for workers able to meet their technical, educational, and soft skill requirements. As documented in this report, solar employers most frequently focus on a candidate’s experience when determining whether they would make a good fit. An overreliance on experience can cause companies to overlook otherwise qualified – though inexperienced – candidates, and may cause them to face even greater difficulty in recruiting talent in the face of contracting pools of experienced workers. The develop- ment of a comprehensive set of assessment tools that evaluate all aspects of a candidate’s suitability for employment (not just technical skills) can be of great value in overcoming or avoiding these issues. Support early stage R&D. Due in part to continued declines in the price of traditional solar goods, investment in early-stage research and development is down sharply. Techni- cal innovation is critical for the long-term competitiveness of the industry, yet both public and private dollars to support it are significantly lower. Given the low returns on R&D investments expected in the private sector, the gap in research funding from private sourc- es will likely persist, suggesting an increased need for public sector support of early stage research on new and more efficient solar technologies and applications.
  • 57. APPENDIX: Census Methodology and Data Sources The National Solar Jobs Census methodology is the most closely aligned with the Bureau of Labor Statistics’ methodology for its Quarterly Census of Employment and Wages (QCEW) and Current Employment Statistics (CES). Like BLS, this study uses survey questionnaires and employer- reported data, though ours are administered by phone and email, as opposed to mail. Also like BLS, we develop a hierarchy of various categories that represent solar value chain activities (within their broader NAICS framework), develop representative sample frames, and use statistical analysis and extrapolation in a very similar manner to BLS. We also con- strain our universe of establishments by relying on the most recent data from the BLS or the state departments of labor, depending on which is collected most recently. We believe that the categories that we have developed could be readily adopted by BLS should it choose to begin to quantify solar employment in its QCEW and CES series. The results from the Census are based on rigorous survey efforts that include 66,986 tele- phone calls and over 25,655 emails to known and potential solar establishments across the United States, resulting in a margin of error +/- 2.03% at a 95% confidence interval. Unlike economic impact models that generate employment estimates based on economic data or jobs-per-megawatt (or jobs-per-dollar) assumptions, the National Solar Jobs Census series provides statistically valid and current data gathered from actual employers. The survey was administered to a known universe of solar employers that includes 15,552 establishments and is derived from SEIA’s National Solar Database as well as other public and private sources. Of these establishments, 2,839 provided information about their solar activities (or lack thereof), and 1,634 completed full or substantially completed surveys. The margin of error for the known universe is than +/-2.26%. The survey was also administered to a stratified, clustered, random sampling from various in- dustries that are potentially solar-related (unknown universe) that include a total of 260,824 establishments nationwide. After an extensive cleaning and de-duplication process, a sam- pling plan was developed that gathered information on the level of solar activity (including none) from 6,230 establishments. Of these, 435 establishments qualified for and completed full surveys. The margin of error for the unknown universe is 1.1%. The indirect and induced job figures were gathered using averaged figures from EMSI’s input output model (see Data Sources, above). The industries selected for installation were electri- cal contractors and power and communication line construction; for manufacturers, semi- conductor equipment manufacturing and other electronic and electrical assembly; for sales and distribution, wholesale trade of electronic appliances and wholesale trade of heating and hot water apparatus; and for project development, heavy civil construction and engineering and power and communication line construction.
  • 58. The following three-phased methodology describes the survey process used to gather employer information from both self-identified or known solar employers, those establish- ments that are connected to solar industry associations and can be found on solar employ- er databases, and unknown solar employers that are found in industry classifications that are more likely to have solar employers. This methodology describes the process that was followed for all of the solar employer surveys except for those completed by utilities in earlier editions of the Census. Phase 1: Develop, classify and analyze a database of self-identified or known solar em- ployer The first phase created a comprehensive database of all known or self-identified solar employers across the country. This database was developed by SEIA and its partners. The comprehensive database was developed from all of the partners’ contact information of employers. Duplicates were identified and removed following a stringent evaluation of firm phone numbers, locations, and firm names. The database of employers did not include variables that consistently identified which sector (manufacturing, installation, sales and distribution, project development, and other) each employer was involved in, the size of the employer, or whether the employer had a single location or represented multiple locations. Phase 2: Survey of self-identified or known solar employers. The second phase of the survey research was a census, using online and telephone surveys of all solar employers from the database developed in phase one. Employers were asked which sector they were involved in (installation, manufacturing, wholesale trade, research & development and other) and based on their response they were forwarded to the ap- propriate survey instrument. All employers in the database with email information were sent multiple online invitations and for those that did not complete an online survey, they were called up to three times. The employers without email information were called up to five times and asked to participate in the survey by completing a brief phone survey. These results represent the solar employer community that is connected to regional and national solar trade associations. It is important to note that surveys were completed for each employment location and not necessarily for each firm. So if a solar employer was asked to participate in a survey, s/ he would be asked about the employment profile of a given location and not of the entire firm. Phase 3: A random sampling of employers in industry classifications that are most likely to have unknown solar employers.
  • 59. The final phase of the survey research was a sampling of employers in specific industries within wholesale trade, manufacturing, and the construction (installation) industries. The survey was completed over the phone and the sample was stratified by industry, region, and firm size (4 or fewer employees or 5 or more employees). These results represent the solar employers that make up the wholesale trade, manufacturing, and construction indus- try employers within the industry classifications noted below. It is important to note that the percentage of overlap between the known and unknown universe of solar employers was calculated based on a thorough search of the known firm database to the unknown universe file or establishments that indicated they had already completed a similar survey. The resulting calculation of overlapping establishments was taken out of the total estimate of establishments in the unknown universe of solar employ- ers. Data for the “other” category does not capture all jobs or establishments in the category. Although some “other” establishments are included in the known universe (see section accounting, legal, finance, and other ancillary establishments spend only a very small por- tion of their time on solar activities. Thus, full inclusion would lead to inflated employment counts. This report cites comparison data from the Bureau of Labor Statistics Current Employment Statistics and Economic Modeling Specialists International Class of Worker data for 2014. EMSI is typically selected for instances where self-employed and covered total employ- ment comparisons (such as past and future growth rates) are required. BLS data are used for monthly absolute jobs figures. EMSI Data Sources and Calculations Industry Data In order to capture a complete picture of industry employment, EMSI basically combines covered employment data from Quarterly Census of Employment and Wages (QCEW) produced by the Department of Labor with total employment data in Regional Economic Information System (REIS) published by the Bureau of Economic Analysis (BEA), augment- ed with County Business Patterns (CBP) and Nonemployer Statistics (NES) published by the U.S. Census Bureau. Projections are based on the latest available EMSI industry data, 15-year past local trends in each industry, growth rates in statewide and (where available) sub-state area industry projections published by individual state agencies, and (in part) growth rates in national projections from the Bureau of Labor Statistics.