While most media coverage of solar power has focused on the industry’s steady growth, not all reports are rosy. According to the online electrical industry news source, Utility Dive, solar’s bright fortunes could be taking a slight dip on the horizon.
The website references market information from financial analysts at UBS, which point to a “drastic slowing” of residential solar installations. Specifically, the data shows a sharp annual decline in hiring activity for sales roles in the solar sector.
According to Utility Dive, other indicators also point to a decline in business for the sector. Several installers, including SolarCity, SunPower and First Solar adjusted their projections or estimates for installations and revenue. Their adjustments could be a result of a combination of factors, including increased competition, slowing demand and lowering prices.
Much of this trend could also reflect the extension of the Investment Tax Credit in December 2015. The industry has always been vulnerable to the politics of Congress, which creates a permanent state of uncertainty around the tax credit. That scares investors and holds up projects. According to Utility Dive, companies “geared up” to hire staff and get projects completed before the sunset date of the credit. Now that the credit has been extended, there is less pressure to hire and get projects underway, and a natural contraction occurs as companies try to get through the backlog.
Solar industry advocates don’t necessarily disagree. The Solar Energy Industry Association (SEIA) also projects that solar deployment and jobs will decline over the next year. According to the SEIA, deployments will drop from 14,000 megawatts (MW) to about 10,000 MW. Similarly, jobs will decline from a peak of about 300,000 in 2016 to about 275,000 in 2017.
However, the future is not entirely cloudy. SEIA maintains that the Solar Investment Tax Credit will lead to stability and “sustained” long-term growth. It projects the industry to eventually overcome the temporary decline, by deploying more than 20,000 MW of capacity and creating more than 420,000 jobs by 2020.
About The Author
LAEZMAN is a Los Angeles-based freelance writer who has been covering renewable power for more than 10 years. He may be reached at [email protected].