The number of jobs in the solar power industry now outnumbers those in the coal-mining sector. But job growth doesn't always mean technology growth; investments in solar power have plummeted.
According to the U.S. Bureau of Labor Statistics, as of April 2014 there were 78,500 coal-mining jobs, not including self-employed contractors. Another report by the U.S. Mine Safety and Health Administration counted 123,227 jobs in 2013, according to PolitiFact.
In contrast, the Solar Foundation's "National Solar Jobs Census," released earlier this year, showed that the solar power industry employed around 143,000 Americans as of November 2013. That's up by 24,000 jobs, or 19.9%, from 2012.
Solar power industry job growth.
Solar industry employment is expected to grow by another 15.6% this year, according to the Solar Foundation.
Those jobs are attributed mainly to a massive boom in solar installations, which now total 400,000 nationwide, 11 times what were in place in 2008. For example, North Carolina added 335 megawatts (MW) of solar power capacity last year for a total of 592 MW. It now ranks fourth in the U.S. for solar capacity installed.
Today, there are about 13,000 MW of solar capacity installed throughout the U.S.; that's enough electricity to power more than two million homes.
Even with that rapid growth, the U.S. still only gets about 0.23% of its power from solar sources; it gets 39% of its power from coal, 27% from natural gas and 19% from nuclear power, according to Philip Jordan, vice president of the Solar Foundation.
Overall, the U.S. only gets about 12% of its energy from renewable energy sources, 6% of it from hydroelectric and 4.13% from wind turbines.
The Department of Energy (DOE) SunShot Initiative has a goal to make solar energy cost-competitive with other forms of electricity. That goal is to bring the cost of a kilowatt hour of solar power to just 6 cents by 2020 -- the same as coal-fired power. Today, solar power costs about 11 cents per kilowatt hour, according to the DOE.
"The great news is you don't drill for solar, you don't mine solar, you manufacture it," said Rhone Resch, CEO of Solar Energy Industry Association (SEIA). "When you manufacture it, you install it, and that means you're creating jobs in the field."
Currently, conventional silicon solar cells have a maximum efficiency rating of 24%.
By increasing solar cell efficiency, the cost of solar power hardware is driven down, Jordan said. (Hardware makes up 44% of the cost of solar power. Labor and other overhead accounts for another 36% with marketing and permits making up the remaining 20%.)
Job growth in the renewable energy market is related to installations and sales -- not investments in technology development, according to Jordan.
"All the trends indicate that solar is becoming a more economical and competitive technology," Jordan said. "But the financing is all about big solar farms rather than early stage R&D for concept work. Clearly, there's been a drop in that kind of investment."
Ironically, because the price of photovoltaic (PV) modules (the building blocks of solar panels) bottomed out last year, investors worldwide became concerned that profits would also drop. PV prices plummeted after China saturated the market with low-cost solar panel modules. The result: PV capacity rose from 31 gigawatts (GW or a billion watts) in 2012 to a record 39 GW last year, even as investments in solar capacity dropped, according to a 2014 report by Bloomberg New Energy Finance.
The total global investment in renewable power (excluding large hydroelectric projects) fell for the second year in a row in 2013, reaching $214 billion worldwide -- 14% lower than in 2012 and 23% below 2011 levels, when there was a record high in renewable energy investments.
As China continues a flurry of solar installments, it will likely devour its own surplus, allowing the price of solar panels to recover, Jordan said.
However, adding to the skittishness among investors are the few high profile corporate bankruptcies by solar power developers, such as Advanced Solar Technologies and Solyndra, which had received a $535-million Energy Department loan guarantee.
"[With] many of the high-profile bankruptcies that happened...there were a lot of different reasons, but it's also very hard to try to invent a better mouse trap," Jordan said. "At the moment, we can certainly get more efficient than the typical PV unit that goes on rooftops, but the prices have come down so quickly that there's a significant moving target that has scared away a lot of investors."
In 2013, U.S. solar firms received just $92.2 million in series A and B financing, down from $164 million the year before; that compares with 2008 when the industry saw peak $1.4 billion in seed money, according to Jordan.
The ongoing decline in investment, according to Bloomberg, reflects not only the drop in solar system prices, but also government policy uncertainty in many countries.
Government policies that cut solar subsidies or capped them in nearly a dozen countries, including the U.S., Germany, India, the U.K., France, Sweden, Romania, Italy, Bulgaria and Poland, also killed off private investment, Bloomberg noted in its report.
Private and government investments are going toward lower risk projects, such as massive utility installations instead of research and development, Jordan said.
"Ultimately, the answer for the future is how low will prices go on traditional technologies?" Jordan said. "If solar/wind, etc. become significantly cheaper than fossil fuels, what is the impetus for new technologies? If so, innovation will focus on improvements on the margins and less on altogether new technologies."
Lucas Mearian covers consumer data storage, consumerization of IT, mobile device management, renewable energy, telematics/car tech and entertainment tech for Computerworld. Follow Lucas on Twitter at @lucasmearian or subscribe to Lucas's RSS feed. His e-mail address is [email protected].
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