Shedding Light On Solar Job Growth

Justin Sykes Analyst, Americans for Tax Reform
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The U.S. solar industry over the last decade has evolved into an industry so reliant on subsidies and sweetheart deals that many question whether the industry is viable absent such support. Supposed “growth” in solar is repeatedly touted by pro-subsidy lawmakers, including President Obama in his 2016 State of the Union. While supporters of subsidized cronyism are often quick to point to industry-crafted reports, the truth is such findings should be taken with a grain of salt.

With regard to the solar industry numbers some in Congress love to cite, specifically job growth numbers, the manner in which such figures are compiled should give lawmakers and voters pause. Take for instance the solar industry’s premier jobs report, the “State Solar Jobs Census” (the Report), compiled annually by the Solar Foundation. Pro-subsidy politicians often point to the Foundation’s annual Report to justify continuing taxpayer-backed handouts and favoritism.

One of the biggest critiques of the Solar Foundation’s Report is its reciprocal nature. For instance you have a report supporting the solar industry, compiled by a solar education group, with figures derived from surveying solar industry stakeholders. In fact the Report’s jobs numbers are based on phone and email surveys of solar companies that self-report the jobs data to the surveyors.

Figures on solar job growth can also be somewhat questionable in general, as the figures don’t always paint a realistic picture as far as the free-market is concerned. For an industry receiving such extreme government favoritism, solar job growth numbers are somewhat illusory, as they are premised on the existence of massive state and federal subsidies and mandates.

The question that always arises is whether such job growth would exist in the free-market, absent government support. Thus one can assume any job growth the solar industry can point to is simply a product of special government treatment, and not that of true free-market forces.

One of the most recent examples of the solar industry’s reliance on government sweetheart deals can be seen in Nevada, which in 2015 eliminated retail rate net-metering. As a result, solar companies like SolarCity, Sunrun, and Vivint have announced they are pulling out of the state. According to a January 2016 press release, SolarCity announced they will be “forced to eliminate 550 jobs in Nevada.”

In the Solar Foundation’s 2015 State Solar Jobs Census, the Foundation projected solar job growth in Nevada to be 18.5 percent for 2016. Yet in the same report the Foundation admitted that should the net-metering rulings remain, “growth will likely be considerably less than the 18.5 percent projection.”

It is also the case that solar subsidy proponents often compare “large percentage growth” in solar employment with job growth in the overall economy. Yet such comparisons are wholly misleading. For example, the most recent Solar Jobs Report stated, “Solar employment grew nearly 12 times faster than the national employment growth rate of 1.7 percent during the same period.”

The problem with this comparison is that relatively low base numbers for solar employment inflate the contrast between growth in solar jobs and job growth in the national economy. For instance if the solar industry had one job in 2015 and two jobs in 2016, the job growth percentage would be at 100 percent. So by comparison solar growth always appears exponentially higher than national figures. While this comparison sounds great in talking points, the fact is it is apples to oranges.

As lawmakers on Capitol Hill advocate for continued subsidies and government favoritism towards the industry, it should be realized the figures supporting their arguments, especially job growth, are not always as cut and dry and they may seem. Thus while it may take a village to raise a child, it takes big-government cronyism, subsidies, and sweetheart deals to raise an entire industry.