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The Solar Industry Is Booming. So Where Are the Jobs?

Though annual installations of solar panels increased by nearly 60 percent between 2016 and 2021, the solar energy industry employed 11 percent fewer people in 2021 than it did five years earlier.

(TNS) — The solar boom underway in places like West Texas has been heralded by politicians and industry as a means to replace the fossil fuel jobs that are expected to disappear in the transition to clean energy.

Only those job gains are not materializing as expected.

In 2021, the most recent year for which data was available, the solar industry employed 11 percent fewer people — more than 40,000 workers — than it did five years earlier, according to data compiled by the Department of Energy.

That came even as solar installations rose to record levels, with developers building the equivalent power capacity of nine nuclear power plants on rooftops and open land across the United States. Between 2016 and 2021, annual installations of solar panels increased nearly 60 percent, according to the trade group Solar Energy Industries Association.

The phenomenon of declining jobs and rising efficiency could have profound implications in Houston, where fossil fuels have long driven the local economy, raising questions around whether there will be enough clean energy jobs to replace those lost in oil and coal.

Driving the falloff in solar jobs is a marked improvement in the speed with which developers install solar systems, increasing investment in large-scale solar farms where the same number of megawatts can be built with fewer workers and technological advancements that allow solar panels to produce more electricity within the same physical footprint.

In California's San Joaquin Valley, one of the epicenters of the U.S. solar boom, developers are now able to build a solar farm many times larger than they did a decade ago with only a marginal increase in workers, said Ronny Jungk, business manager of the Fresno, California, chapter of the International Brotherhood of Electrical Workers.

"We started doing utility-scale solar 10 to 12 years ago. Twenty megawatts was a big job and they would employ around 125 people," he said. "Now doing they're doing 150 megawatts with maybe 175 people. They're definitely getting more streamlined and more efficient."

The increase in productivity comes as President Joe Biden seeks to shift the nation's energy sector away from fossil fuels, replacing jobs in coal and oil with equivalent jobs in wind, solar and batteries.

It's early in the transition, but Department of Energy data from 2021 shows an overall energy workforce that was 5 percent smaller than in 2016.

The downturn reflects job losses in oil and gas that followed the collapse of the shale drilling boom in 2015 and then a pandemic five years later that caused crude prices to go negative for the first time in history. Between 2016 and 2022, employment in the oil and gas industry declined 22 percent, to fewer than 700,000 workers overall.

Pushed by Wall Street investors to reduce spending, oil companies are now producing a barrel of oil with roughly half the manpower they did in 2016, said Michael Montgomery, an economist with S&P Global Market Intelligence.

"It took a while, but the collapse in oil and gas prices set off on a massive cost-cutting process, and this is the improved productivity that came out of that," he said.

Unmet Promise

The expectation was that the rush to develop clean energy would offset the job losses in oil and coal, the latter of which lost more than 22,000 jobs, or 30 percent of its workforce, between 2016 and 2022.

During his presidential campaign in 2020 Biden said his approach to climate change would result in 10 million new jobs. At a climate summit in 2021 he said it was "not about the threat that climate change poses, it's about the opportunity that addressing climate change provides."

And it has to some degree, with employment in the wind energy sector growing 17 percent to more than 113,000 workers between 2016 and 2021, and jobs modernizing the nation's power grid increasing 111 percent to more than 35,000 workers.

But the solar industry has lagged.

Solar had a hiring boom in the mid-2010s as developers rushed to build residential and commercial systems before the expiration of federal tax credits at the end of 2016. And while Congress ended up extending those credits — which are now in place through 2032 — solar jobs declined for two years in a row before beginning to rise again in 2019. That trajectory continued through the pandemic, but the industry has yet to reach the level of employment it achieved in 2016.

Abigail Ross Hopper, president of the Solar Energy Industry Association and formerly a high ranking official in the Department of Interior during the Obama administration, acknowledged efficiency gains had led to job losses but said she expected employment in the sector to double by 2030.

"I think we're reaching the limits of our efficiency," she said. "Every chart looking forward shows a significant rise in deployment, so I think we'll see a commensurate increase in labor demand."

New Funding

The Biden administration and Democrats in Congress are seeking to help hiring along through a historic investment in clean energy through last year's Inflation Reduction Act, which includes $369 billion in funding for solar, wind, batteries and other technology designed to reduce greenhouse gas emissions.

Garrett Nilsen, deputy director of the Solar Energy Technologies Office at the Department of Energy, said in a statement despite the recent decline he expected the solar industry to create "even more good-paying jobs" in the future.

"The good news is that annual installation of solar is still increasing and the incentives in the Inflation Reduction Act are accelerating the clean energy transition," he said.

But it's unclear the solar industry will be able to achieve anywhere near those goals.

Analysts at Wood Mackenzie, the energy research firm, are only forecasting growth at half the rate described by the Biden administration, pointing to the administration's efforts to slow the importation of solar panels, which currently account for 80 percent of the global market.

There is much at stake for Houston and for Texas.

The Houston region lost an estimated 125,000 oil and gas jobs between 2014 and 2020, and stands to lose another 270,000 to 650,000 jobs in the energy transition, according to analysis conducted for the nonprofit Greater Houston Partnership by consulting firm McKinsey & Co.

But that same analysis found the region could gain up to 560,000 new jobs if the region shifted towards clean energy.

That effort is already underway, with city leaders, universities, startups and large oil companies working together to turning Houston into a hub for not just oil and gas but clean hydrogen fuel, batteries and wind and solar power equipment.

Asked whether the decline in solar jobs posed a threat to that effort, Jane Stricker, a former BP executive and a senior vice president at the Greater Houston Partnership, said clean energy, like any industry, was constantly evolving and growing more efficient and the jobs of today would not necessarily be those of the future.

"The next new thing will always be coming in," she said. "A big part of what our economic development team is working on is making Houston a hub for energy manufacturing."

Among construction workers actually building the solar farms, there is little worry — they're simply too busy.

In California's San Joaquin Valley, Jungk said he had so many solar projects lined up he wasn't sure he had enough workers to fill all the jobs.

"I had a contractor bidding for a project starting in April, and I'm expecting a 700 megawatt project later this year, which hopefully gets postponed," he said. "I have stuff lined up for years."

(c)2023 the Houston Chronicle. Distributed by Tribune Content Agency, LLC.
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