TODAY’S STUDY: JOBS IN THE SUN
State Solar Jobs Census Compendium
February 2016 (The Solar Foundation)
Introduction & Overview
The Solar Foundation’s State Solar Jobs Census 2015 provides current employment, trends, and projected growth in the solar industry. This year’s State Census is comprised of individual reports for 14 states, an interactive districtlevel map at www.SolarStates.org, and this Compendium, which includes summaries of all states and regions based on the nine U.S. Census Divisions.
This work follows the January 2016 release of the National Solar Jobs Census 2015. The National Census found that as of November 2015, the U.S. solar industry employs nearly 209,000 solar workers, representing a growth rate of 20.2% since November 2014, and 123% since The Solar Foundation first started tracking solar workers in 2010. In 2015, the solar industry added workers1 at a rate nearly 12 times faster than the overall economy, accounting for 1.2% of all jobs created in the U.S. Over the next 12 months, employers expect to see total employment in the solar industry increase by 14.7% – which is 13 times faster than the U.S. workforce as a whole is expected to grow2 – to approximately 240,000 solar workers.3 Nationally, solar power currently produces approximately 1% of U.S. electricity generation, but that too is expected to increase in coming years.4
Factors that Differentiate Solar Power Among States
This section addresses key factors that help to differentiate solar power employment and development among the states. Such factors include:
• Customer demand
• Solar radiation/resource
• Grid access
• Installation costs
• Energy prices
• Local and state policies
More populated states generate greater residential, commercial, and industrial demand for electricity, including solar power. While California, the nation’s most populated state, leads the country in solar power, the next four most populated states – Texas, Florida, New York, and Illinois – do not rank in the top five for installed solar capacity, and only New York joins California as a top five state for total solar jobs.
Some states receive far greater solar radiation in a given year than others, as seen in the National Renewable Energy Laboratory map below. The sunny, dry Southwest has the greatest natural solar resource, generating on average more electricity from photovoltaic cells per square meter than in other part of the country. Not surprisingly, the four states with the best solar resource – Arizona, California, Nevada, and New Mexico – rank in the top ten for solar jobs per capita. Nonetheless, regions that receive less solar radiation can also generate ample power. Germany’s solar resource is less than that of any U.S. state except Alaska, yet Germany boasts 40 GW of installed solar capacity, more than all U.S. states combined.5 Closer to home, even a system in Portland, Maine can produce over 90% of the solar electricity, on an annual basis, as a comparable system operating in Miami, Florida.
Solar power systems typically require access to the grid. Large, utility-scale solar generation, for example, must have access to the electric grid to sell bulk power to consumers. While it may be preferable to locate utility-scale solar projects in remote areas, such areas often lack transmission lines that allow access to the grid. This disconnect can limit the potential for high radiation regions with ample open space to support more populated regions. However, the growth of distributed solar power could decrease the need for additional bulk power generation and related transmission lines.7
The general decline in installation costs has been essential to solar market growth. Since 2010, U.S. average installed costs have declined 35% for residential, 58% for nonresidential, and 67% for utility-scale installations.8 However, among the states, there is a considerable amount of variability in these costs. A 15-state study of smaller (<15 kW) PV systems found that installation costs ranged considerably among states.9 Factors that influenced installation costs include (1) potential electric bill savings, (2) government incentives, (3) number of installers in the local market, (4) installer experience, (5) installation size, (6) installation ownership (customer of third party), (7) construction type (new construction or retrofits), (8) PV materials (thin film or crystalline silicon), and (9) source of materials.
Installation costs typically range from $2.00 to $4.00 per watt, with residential systems costing more, and varying more, on average than non-residential and utility-scale systems.10
The economic benefit of solar power tends to be greater in states with higher average electricity prices. Mainland U.S. electricity prices range from a high of 16.73 cents per kWh in New England, to a low of 8.48 cents per kWh in the West South Central Division of the U.S. Some of the highest prices for electricity can be found in populous states such as California, New York, and New Jersey, while prices are highest in Hawaii, at 26.81 cents per kWh. As of September, average electricity prices for 2015 were 10.51 cents per kWh nationwide. Due to the increased economic benefits of solar in states with traditionally expensive electricity, nearly all of the high-rate states have seen significant solar development in recent years.
State and local policies and incentives can differentiate solar development among states. Chief among these are net metering and interconnection. A majority of states offer net metering, which allows owners of residential and commercial solar energy systems to sell excess power back to the utility. For most states, customers can sell the excess power back to the utility at the retail electricity rate. For other states, such as Hawaii and Nevada, excess power is credited at a lower wholesale rate, decreasing investment return on solar installations in those areas. States may also have aggregate system caps, meaning that utilities will only purchase a fixed amount of distributed power in a given year. Finally, there may be interconnection charges or fees for hooking distributed power up to the grid. Almost half (22) of all states received an “A” or “B” grade for net metering and interconnection as shown in the table on the next page.
There are numerous state incentives, such as rebates and tax credits, that encourage solar development. Such incentives are often influenced by broader goals for renewable portfolio standards (RPS) – in which case states commit to derive a specific percent of their power generation from renewable energy sources by a specified year. RPS designated renewable energy sources typically include hydro-electric, wind, solar (PV & thermal), biomass, and geothermal. States typically designate 15% to 30% of their electricity generation from renewable sources by a year in the relatively near future. Some states such as California, New York, Maine, and New Hampshire have set aggressive RPS goals that will help to drive solar development in those states for years to come.
There are policy developments related to technological changes that can differentiate solar power among states. Demand response tools, such as “automated load control, smart grid and smart metering, real-time pricing, and time-ofuse tariffs,” can provide flexibility for intermittent power sources, such as solar, to more efficiently meet demand.11 Efficient battery storage could further leverage these demand response tools. Additionally, the growing use of electric vehicles will increase demand for electricity. States that are quick to accommodate electric vehicles will experience a correlated growth in electricity demand, which may serve as an additional driver for increased solar development.