2016 was the best year on record for solar energy in the United States. A report from the U.S. Department of Energy at the time showed that solar energy was responsible for a much larger share of employment in the electric power sector (43%) than the whole of the fossil fuel industry combined (22%). With such robust numbers, it seemed as though solar energy, and renewables more broadly, were about to revolutionize the energy sector in the United States and lead the push towards cleaner energy and lower carbon emissions.
Trump Tariffs Challenge Growth
However, solar energy jobs have stagnated and dipped for two consecutive years since the Department of Energy’s initial report, with a loss of 10,000 jobs in 2017 followed by a further 8,000 in 2018. Although some job losses were foreseen as a result of project finalizations in several states, the biggest contributing factor was President Trump’s tariffs on solar panels. The first shot fired in what would become a wide-ranging trade war with China in 2018, the U.S.’ decision to add a 30% tariff on foreign-produced solar panels had a negative effect on its domestic solar industry, which heavily relies on cheap imports.
U.S. President Donald Trump speaks after signing Section 201 actions next to Bob Lighthizer, U.S. trade representative, left, in the Oval Office of the White House in Washington, D.C., U.S., on Tuesday, Jan. 23, 2018. Trump slapped tariffs on imported solar panels and washing machines on Monday in his first major move to level a global playing field that he says is tilted against American companies.© 2018 BLOOMBERG FINANCE LP
The Solar Foundation’s latest report has called the last two years “challenging”. Since that record year, the solar sector has lost close to 18,000 jobs, but the Foundation is confident that 2019 will be the year they bounce back, as it explains: “Based on the Census survey, the solar industry expects a jobs turnaround with 7% growth in 2019.” That being said, the Foundation also acknowledges that its predictions could be wrong, as it was when it projected a 5.2% job growth in the sector for 2018. Despite this, it believes that “there is considerable evidence that the outlook for the solar industry is improving, and that solar employment will resume a growth path in 2019 and beyond.”
U.S. Solar Jobs by Year Chart of the National Solar Jobs Census 2018SOLARJOBSCENSUS.ORG
Prior to the implementation of the tariffs, many industry leaders such as the Solar Energy Industry Association’s President and CEO Abigail Hopper warned of the potential damage that could be caused: “The current solar market, including its production and trade patterns, was both foreseeable and predicted by experts across the globe. What’s also been predicted are the inevitable job losses in the US and economic harm if tariffs are imposed on one of the fastest-growing industries in America. We urge the president to put America first and say no to solar tariffs.”
ISolar panels installed by Tesla power a community of 12 homes in the mountain town of Las Piedras, Puerto Rico. The homes still did not have power from the national grid, more than 10 months after Hurricane Maria and now are operating exclusively on solar energy. ASSOCIATED PRESS
The months immediately preceding the application of the tariffs saw solar panel imports explode as foreign manufacturers and U.S. developers alike looked to get ahead of any potential problems. Despite their future-proofing attempts, the growing uncertainty created by the tariffs led to many developers canceling and freezing billions of dollars of investments and projects. Now, due to last four years and decreasing by 5% yearly, the tariffs have already very clearly had an impact on the solar sector, with solar executives lamenting the increased costs and the loss of several large-scale projects.
“Solar was really on the cusp of being able to completely take off,” Zoe Hanes, the CEO of Pine Gate Renewables told Reuters. In 2018 the company only completed half of the 400MW of solar projects it had planned and halted its the hiring of 30 new employees. To counteract the effects of the tariffs, the Trump administration extended the government tax credits on solar installations. Made in a bid to promote domestic manufacturing, initial results are mixed as to how successful the scheme has been.
Reasons For Hope
With uncertainty over the tariffs slowing down the progress made over the past decade, a boost to the industry would certainly help spur a bit of hope in a solar sector that has a lot left to give. For that reason, the Solar Foundation’s predictions are welcome news to developers.
A portion of the largest solar installation in New York City in the borough of Staten Island in New York. The solar industry is blaming tariffs for delays and cancellations of major solar energy projects. An estimated $8 billion worth of utility-scale projects were canceled or put on hold for the five-year period that ends in 2022, according to a new report from the Solar Energy Industry Association and Wood Mackenzie Power & Renewables. ASSOCIATED PRESS
A surge in growth over the next year would also help attain the goals the industry has set for itself as a leader in renewable energy, with the Solar Foundation quick to point out that they cannot afford to be complacent, stating that: “The urgent challenge of climate change means the progress we have seen to date is not nearly enough. Solar energy will need to develop and expand even faster in order to reduce carbon emissions to sustainable levels. If this can be achieved, a host of additional benefits will follow, including new solar job growth.”