If you have been one to dismiss solar as being too costly or impractical, you might want to take a second look. Times are changing.
A briefing I attended held by the Environmental and Energy Study Institute (EESI) clearly revealed the solar industry’s recent impressive growth. According to the 2013 Solar Industry Job Census performed by the Solar Foundation, the solar industry grew at ten times the national average last year, creating 24,000 new jobs. Since 2010, US Solar Industry employment has increased by 53% and now employs more than 142,000 Americans, more than both the auto manufacturing and coal mining industries.
The greatest factor causing the expansion of this industry is its steadily declining cost. As seen below, the cost of solar power today is less than $2 per watt, about 1% of what it was in the mid-1970’s, and 25% of what it was just 6 years ago in 2008. SunShot, an initiative by the DOE to make solar energy cost-competitive with other electricity sources, aims to further reduce this cost to $1 per watt by 2020. Unlike 30 years ago, when the majority of people installing solar might have been dubbed “eco-crazy”, currently 51.4% of people installing solar say they are doing so to save money and 22.9% say costs are competitive with other utilities. A logical economic argument now exists for solar installation: go green and save green.
Aside from technical advances, solar has also been able to thrive in recent years as a result of increased collaboration between the DOE and private industry. The investments made by the Office of Energy Efficiency & Renewable Energy made initial projects viable because it mitigated certain risks and increased planning and analysis. Leaders in businesses and government have also furthered the exploration of solar: Walmart is currently the largest solar installer, and Obama has committed the federal government to obtaining 20% of its power from renewables by 2020.
That doesn’t mean that national distribution has been even. Far from it. California has been a leader in the solar world and currently utilizes more than 40% of its total installed solar capacity, employing one third of all solar workers in the nation with 47,233 jobs. Just last year, half of all its solar capacity ever was added. Unsurprisingly, it leads the country in clean energy, deriving 25% of its power from renewable sources, and has a goal of 33% by 2020. Other states such as Arizona, North Carolina, Massachusetts, and New Jersey are continuing to lead the way with solar installation, price efficiency, and job creation.
The Solar Industry isn’t just creating jobs; it’s creating good ones. Most solar employees are required to have some type of related experience or training, are steadily employed, and earn competitive wages. An average solar installer earns around $20-$23.63 per hour, a rate higher than the average roofer and construction worker and comparable of that to a skilled electrician. Furthermore, jobs created by the solar industry are ongoing and not easily outsourceable, as the majority of solar workers are involved in installation. Solar jobs have also greatly aided veterans. A report highlighting the role of veterans in the solar industry found that it provides more than 13,000 veterans with job opportunities as of November 2013 and that veterans represent nearly 10 percent of all solar workers.
Still, there are limitations and hindrances for the solar industry. First is the expiration of the Investment Tax Credit (ITC), a federally implemented 30 percent tax credit for solar systems installed on residential and commercial properties. The lower cost structure allows companies to develop long-term investments with a higher level of market certainty and drives the level of competition and innovation in the field. Unfortunately, President Obama’s 2015 fiscal year budget plans to phase out the ITC and replace it with a refundable Production Tax Credit (PTC) by the end of 2016, so that solar installation would only benefit after its installation and production of power. President and CEO of SEIA calls this “a huge step backward,” as “the PTC simply can’t address the upfront costs of fuel-free solar projects.” In order for solar to remain competitive, the ITC would need to be restored, and much before 2016.
Another barrier to solar becoming even more cost effective are the soft costs associated with them: financing, permitting, installation, and maintenance. Jason Walsh, Senior Advisor for the DOE’s Office of Energy Efficiency and Renewable Energy, stated that soft costs now represent up to 64% of the cost of solar installations, and are decreasing at a much slower rate than equipment costs. To put it bluntly, with “18,000 jurisdictions, 3,000 utilities, and 50 states with different rules and regulations”, there’s a lot of red tape preventing the U.S. from increasing solar adoption more rapidly. There are also increasing numbers of conflicts between utilities companies and solar distributors as solar becomes more and more competitive, even though it doesn’t hold the same subsidized advantage as the fossil fuel industry. Just last November, Arizona’s largest utility, Arizona Public Service, spent 3.7 million dollars on an ad campaign leading up to a vote to support imposing a 50 dollar fee on homeowners using solar panels.
At the same time, there are groups like the Green Tea Coalition, a partnership between conservative Tea Party Republicans and The Sierra Club, promoting fair consumer options for solar installers. This collaboration sheds light on the fact that clean energy, economic opportunity, and consumer choice can be synonymous and allow citizens a greater role in activities that affect everyday life.
Furthermore, initiatives like SunShot mentioned above have shown great success. Aimed to make solar cost competitive with other non-renewables, this incubator program helps startup companies in their early stages of development so they can avoid technological barriers and gain private sector investment. Since the program began about 7 years ago, “$104 million in government funds has leveraged more than $1.7 billion in venture capital and private equity investment, demonstrating a ratio of nearly $18 in subsequent private sector support for every $1 of federal support.” The DOE further predicts that once solar becomes cost competitive with other sources of electricity, solar-generated power will grow to supply about 26% of American electricity by 2050. It’s safe to say solar’s future is looking bright.
Curious about what solar looks like for your home? Do your own solar assessment!