CLOUDS LIFTING
Tremendous growth curtailed by COVID-19, solar firms pick back up
Until recently, solar workers were on track to be the fastest growing occupation in the U.S. — faster than health aides and software developers.
The calculus has almost certainly changed, although how much isn’t clear.
In southwestern Pennsylvania, solar prognosticating is showing a “mixed bag,” according to Sharon Pillar Grace, founder and director of the Pennsylvania Solar Center.
“Clean energy job losses as a result of COVID have been profound,” she said, citing a recent study by consultancy E2 that concluded more than 21,000 clean energy workers filed for unemployment in March and April in Pennsylvania. That likely includes several thousand solar installers.
Companies furloughed workers as construction was prohibited in mid-March, she said. But while there are certainly many clients postponing decisions on solar panel installations, there has been no rush of cancellations.
“I’ve also heard companies talk about the impact to investors who are more weary now, which directly impacts the projects that get financed and constructed,” Ms. Grace said.
At the same time, the two-month construction hiatus has lined up a steady chunk of work for reactivated solar companies in the region.
Joe Morinville, president of EIS Solar, is recruiting installers, electricians and engineers. He’s looking to hire up to 10 people in the next three months, although he’s competing with the unemployment pay that furloughed workers are getting. Most of his crew members were making more money on unemployment because of the $600per-week stimulus payment than at work, he said.
Nevertheless, Mr. Morinville called back his construction crews on May 1 and said that business has been strong.
“During shutdown, we continued to sign new projects so we are still ahead of last year even considering some of our biggest sales events were canceled or cut short,” he said.
“With the 3.6-megawatt Pittsburgh Airport microgrid project we are building and our normal pipeline, I believe the lost months of COVID-19 will have little effect on our overall business this year.”
What worries him is balance of reopening the economy to avoid a depression and preventing a resurgence of the virus. “Another extended shutdown would likely cause cancellations and a drop in sales moving forward,” he said.
At Green Solar Systems LLC, a Greensburg-based installation firm, owner Ryan Vesely has been feverishly selling and bidding projects since restrictions were lifted and finding no COVID-19 impact. So far.
“The effects of these two months are certainly lagging because we had a full book of business through
June,” Mr. Vesely said. “Now, we’re installing. But whenever we come out on the other end, are we going to have those sales numbers?”
It was expected to be another banner year for solar, in part because a key federal tax credit granted to solar generators is sunsetting and its fate remains unclear.
The incentive allows residential owners to get a tax credit for 26% of the capital cost of installing a solar system this year. That’s already lower than the 30% that was allowed last year and is scheduled to drop to 22% next year and vanish after that.
The industry is advocating for an extension of the credit, arguing, in part, that it would act as a jobs and stimulus boost.
At the state level, solar advocates are seeking an increase in the share of renewable energy that utilities must buy.
After putting in place a progressive alternative energy requirement in 2009, Pennsylvania has since fallen behind other states in such mandates. The solar-specific requirement has been ramping up to 5.5% and is scheduled to flatline next year.
Ms. Pillar said that about 5 gigawatts of solar projects, which amounts to 4% of all the electricity consumed in the state, is in the pipeline “and many of these [projects] are awaiting action on state level policy.”
“It would be nice to get to the point where we can say the industry is cruising along by itself,” said
Greg Winks, principal at SolBridge Energy Advisors in Pittsburgh.
But while the cost of solar has come down significantly over the past decade and solar is now the fastest-growing fuel in the energy mix that serves the nation’s largest electrical grid, PJM Interconnection Inc., most residential solar owners are still upper middle class people.
Those customers are likely to be more protected from the impacts of COVID-19 recession, he said. “But what policy is in place to provide for low-income residents to participate in community solar?” he said, rhetorically, because Pennsylvania doesn’t have such a policy.
Community solar, which involves residents buying a share of a solar project developed elsewhere, is being debated in Harrisburg.
“The economic crisis that’s coming has created an even greater divide between those that can afford it and those who can’t,” Mr. Winks said.
On the other hand, he can see how the pandemic and resulting shutdowns could awaken a bigger market among people who decide to stick with a home office and for municipalities and companies preparing for the next major disruption.
That kind of thinking isn’t showing up in the project pipeline yet, though. Mr. Wink’s work as a solar consultant hasn’t stopped.
The pipeline has thinned, he said, estimating more than a third of his clients have said, “Let’s put this on hold a little bit to see how the whole economy washes out.”