The Solar Industry Gained Jobs Last Year. But Are Those Good Jobs, and Could They Be Better?

The U.S. solar industry added jobs in 2022, but the topline number tells only part of the story.

The growth was almost all in rooftop solar systems on houses, while jobs related to utility-scale solar farms were down.

And, unions have made only small gains in the industry, part of a complex picture for solar workers.

The employment data, including a 3.5 percent increase in overall solar jobs, are part of the National Solar Jobs Census, released this week by the nonprofit Interstate Renewable Energy Council. The report lists 263,883 solar workers in the United States.

Residential solar, which is mostly rooftop systems, added about 9,500 jobs due to the rising popularity and availability of state and federal incentives. Utility-scale solar lost about 6,000 jobs due to concerns about new tariffs and difficulty obtaining parts.

Solar installation jobs, which are a large subset of overall solar jobs, help to show the diverging trends in residential and utility-scale. Residential solar had 55 percent of all solar installation jobs in 2022, up from 50 percent in 2021.

But I want to focus on labor issues.

In the solar industry, 10.5 percent of workers are represented by a union or covered by a project labor agreement that provides union-scale pay, which is an increase from 10.1 percent in 2021, the report said. This is less than the 11.3 percent of U.S. workers overall who are represented by a union.

The solar industry also has a tight labor market, with 44 percent of solar industry employers saying it was “very difficult” to find qualified workers, the highest in the decade-plus history of this report.

Last year, the average annual pay for a solar panel installer was $48,890, according to the Bureau of Labor Statistics.

That amount is much less than some of the fossil fuel energy jobs that are going away. For example, the average annual pay was $92,250 for fossil fuel power plant operators, and it was $92,960 for construction trades workers in fossil fuel electricity generation.

In some ways these are unfair comparisons in pay because the skills involved are different and fossil fuel power plant workers tend to be older, which is one reason for the higher pay. But even with such caveats, it’s a problem when the jobs of the future pay a lot less than the jobs that are going away.

“There’s no economic reason at all that renewables shouldn’t pay just as much” as fossil fuels, said Kevin Pranis, marketing manager for the Laborers International Union office that covers Minnesota and North Dakota.

His union has members at utility-scale solar projects and at fossil fuel power plants.

He explained that the high pay in coal plants is a legacy of unionization and a desire of utility companies to get along with their local communities. The solar industry grew from a different business paradigm, with developers aiming to keep costs as low as possible, and with most of the jobs being in construction as opposed to operation of plants.

The solar industry has improved the way it treats workers, Pranis said, but he views this as a work in progress. In Minnesota and North Dakota, labor organizations have succeeded in getting solar developers to agree to hire more local construction workers as opposed to transporting crews of workers from other regions. And the pay, while not as high as union leaders would like, has been improving.

While pay level is important, it’s far from the only thing we should be paying attention to. I asked Joseph Kane, a fellow at The Brookings Institution who writes about infrastructure issues, what he views as the most important factors.

He said that the tracking of clean energy jobs and wages is too often like a “bean-counting exercise,” while some of the key factors are difficult to measure.

One of them is whether a job is teaching “a menu of skills that these workers are going to need and develop,” he said.

The Inflation Reduction Act includes standards that allow for developers to increase their tax credits by meeting targets for pay and by having apprenticeship programs. Several states have clean energy laws with similar provisions.

“The new IRA requirements are going to, I think, have a pretty substantial impact in many places,” Pranis. He’s seeing this play out already with projects in his area.

The combination of the IRA incentives and the growth of solar should drive demand in every region to have trained workers who are available to work on nearby projects. This would allow workers to gain the experience they need to command higher pay, and it would give stability to the workers’ families who can rely on a substantial and steady income.

I’ll be watching to see how this plays out, and whether the policymakers and companies behind the energy transition can fulfill the promise that this shift can be good for the climate at the same time that it’s good for workers.

Other stories about the energy transition to take note of this week:

The Biden Administration Is Steering Clean Energy Money to Blue Cities in Red States: Four states—Florida, Iowa, Kentucky and South Dakota—have refused to apply for federal climate funding under the Inflation Reduction Act, so the Biden administration is sending the money to city governments in those states that want to participate, as Adam Aton reports for E&E News. The cities are able to bypass state leaders trying to leave the money on the table. All of the states have Republican governors, except for Kentucky, where Gov. Andy Beshear, a Democrat, faces a tough re-election campaign and an electorate that is often skeptical about funding for clean energy projects. One of the big problems in those states is that small cities are going to be left out, and often do not have the resources to seek funding without the aid of state governments.

Fervo Energy Hits Milestone in Using Oil Drilling Technology to Tap Geothermal Energy: Fervo Energy, a startup company that uses the earth’s heat to produce electricity, said this week that it has reached a technical milestone in proving its technology, which uses drilling methods from the oil industry, as Catherine Clifford reports for CNBC. The company has adapted horizontal drilling and hydraulic fracturing to create reservoirs deep underground that can hold water. The water is superheated by the Earth and then gets pumped to the surface, where it turns to steam that spins a turbine to produce electricity. The company’s test at a 3.5-megawatt pilot plant shows that this technique can be used to produce electricity in a wide variety of places, which is different from existing geothermal power plants, which only work in places where the Earth has high heat close to the surface. This technology, which Fervo intends to use in full-size power plants, is important in part because geothermal is one of the few technologies that has a combination of near-zero emissions and an ability to run around the clock.

Michigan’s Largest Utility Is Accelerating Its Transition to Renewables: DTE Energy, the largest electric utility in Michigan, reached an agreement with 21 interested parties on a plan that would accelerate the company’s timetable for closing its coal-fired power plants and increase its investments in renewable energy, as Julian Spector reports for Canary Media. DTE would close the 3,400-megawatt Monroe coal plant in 2032, which is years ahead of schedule and would be the company’s last coal plant to close. The plan also would spend $11 billion on clean energy projects. It would have been difficult to imagine such a plan being adopted just a few years ago when Republicans controlled the state’s government and DTE was reluctant to close some of its coal plants. But Democrats are now in control and DTE can see some advantages in negotiating a plan for a transition to clean energy, rather than waiting for lawmakers to require such a shift.

Solar Contract Prices Fall for the First Time Since the Onset of Covid-19: LevelTen Energy, which operates a marketplace for solar “power purchase agreements,” said this week that the average prices for the contracts in North America fell 1 percent in the second quarter of 2023, following three years of increases, as Emma Penrod reports for Utility Dive. The contracts are an important part of how project owners sell their electricity to buyers like utilities, governments and large businesses. Contract prices are falling because of rising supply of projects coming online and declining costs for components like solar panels. I wrote about the latter last month.

Ford Slashes Price for Base Version of Ford F-150 Lightning: Ford Motor Company has said it is cutting prices for the Ford F-150 Lightning, an all-electric truck, with the base model to sell for $49,995, about $10,000 less than before, Michelle Chapman reports for the Associated Press. Ford said it is making the price cut because of an increase in production capacity and cuts to some raw material costs, but competition also is a likely reason. Tesla has said it has begun production of the long-awaited Cybertruck, although it hasn’t announced pricing, and several other companies are selling or preparing to sell electric trucks.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].