A worker unpacks solar panels at the Connexus Energy Athens Township solar-plus-storage project site in Athens Township, Minnesota, U.S., on Wednesday, Sept. 5, 2018. Connexus Energy Athens Township project integrates large scale battery storage with a solar array to manage peak demand and is the first commercial-battery deployment in Minnesota. Photographer: Ari Lindquist/Bloomberg
© Bloomberg

Employment at companies making equipment for the solar power industry is expected to be lower this year than it was in 2017, despite a small revival helped by tariffs the Trump administration introduced last year.

An annual survey of employment from the Solar Foundation, an industry-backed think-tank, has found that about 35,000 people are expected to work in the US manufacturing panels, brackets and other components this year, up from about 34,000 last year but down from a peak of 38,000 in 2016.

President Donald Trump introduced a new 30 per cent tariff on solar cells and panels early last year, in one of the first moves in his strategy of using import barriers to revive US manufacturing. The results after a year show that those ambitions have met with only limited success, although the worst fears of a devastating impact on developments of new solar projects have also not been fulfilled.

Manufacturing capacity in the US for solar panels, or modules as they are known in the industry, is increasing sharply. In the third quarter of last year, production was running at an annualised rate of about 1.2 gigawatts of generation a year, and companies including Hanwha Q-Cells, First Solar and Jinko Solar plan to increase that by about a further 4GW, the Solar Foundation has calculated.

That manufacturing capacity would be equivalent to more than half of the 8.2GW of new solar generation that the US Energy Information Administration expects to be installed this year. A surge in domestic production would represent a huge shift from the 12 months to October 2018, when about 90 per cent of the panels used in the US were imported.

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The tariffs were set to step down by 5 percentage points every year to 2021, and are only one factor in solar companies’ location decisions. The panels made by First Solar, one of the largest US-based solar manufacturers, have been excluded from the tariffs by the commerce department, but it is still adding to its US production capacity.

The company said last year that strong demand and “recent changes in US corporate tax policies, have encouraged our decision to grow”.

SunPower, one of the other largest US solar companies, has relocated production of its less advanced panels to Oregon, taking over a factory previously run by SolarWorld. The more advanced panels won an exemption from the tariffs, and will still be imported.

Tom Werner, SunPower’s chief executive, said last week that the company was investing in US manufacturing because it wanted to offer its customers the option to buy its panels “assembled right here at home”. The tariffs were also a factor in the decision.

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However, the new investments are not adding large numbers of jobs. First Solar said its Ohio plant would create 500 jobs, and SunPower is employing 200 in Oregon.

Module producers account for only 31 per cent of the manufacturers surveyed by the Solar Foundation, with others making components such as mounting systems and inverters, used to convert the direct current from a panel to alternating current. Across the entire solar manufacturing industry, the foundation expects about 1,200 more jobs to be added this year, after a fall of about 4,400 over 2016-18.

However, by far the largest source of employment in the US solar industry is in installation and project development. The Trump administration’s tariffs provoked alarm in the industry that those activities could be hit hard by an increase in the price of panels, which threatened to make solar power less competitive.

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In the event, that did not happen. Cuts in subsidies for solar power in China meant there was an over-supply of panels on world markets, and prices continued to fall both worldwide and in the US.

Jobs in installation and project development did drop by about 10,000 last year, but there were other factors including policy uncertainty in California that contributed to that slowdown — and the number is expected to bounce back by about 14,000 this year.

Andrea Luecke, president of the Solar Foundation, said that as 2019 was the last year for solar projects to be eligible for the full Investment Tax Credit at 30 per cent, she expected another “fairly strong” year for developments. 

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