This piece is part of a series. Read more.
Employment in the U.S. solar sector stems overwhelmingly from the multibillion-dollar business of deploying and installing photovoltaic hardware, not from its manufacture.
Domestic solar manufacturing is a hot topic right now thanks to Auxin Solar, a tiny California-based maker of solar panels. Auxin contends that unfair international competition is hurting its business, and it convinced the U.S. Department of Commerce to take up its case and consider whether new tariffs should be imposed on panel manufacturers in Southeast Asia.
Plenty of others also share an interest in reestablishing solar manufacturing on American soil, including the Biden administration, Senator Jon Ossoff (D-GA) and two larger companies that are now building or expanding solar-panel factories in the U.S.: Hanwha Q Cells and First Solar.
But as of 2020, only 14 percent of U.S. solar workers were employed in manufacturing — and that figure includes employees building auxiliary equipment such as racking, cables and other components, so the percentage involved in the manufacture of actual panels was even smaller. A far larger share of the solar workforce — 67 percent — works in solar installation and development, according to the most recent National Solar Jobs Census.
If you’re a part of the U.S. solar industry, you know that there’s never been a more promising and more confoundingly frustrating time in this renewable energy segment. Despite hitting record-breaking solar installation marks in 2020 and 2021, the sector’s workforce contracted in 2020 due to pandemic-induced global supply-chain issues. Now, faced with not only the Auxin tariff threat but also other trade issues, including the continuation of tariffs from the Obama and Trump eras and the Uyghur Forced Labor Prevention Act, the solar industry is on its heels and facing its first significant down year.
The U.S. solar industry employed 231,474 workers in 2020, a drop of 6.7 percent from the year prior and its lowest level since 2015. (As a point of comparison, the coal mining industry employed 42,117 Americans in 2020.) Solar manufacturing employment fell even further, down 9.3 percent from 2019 to 2020, landing at a total of 31,050 workers.
These numbers are a clear testament to the fact that the United States has had a thriving solar installation sector, rather than a thriving solar manufacturing sector. The industry was able to achieve its record-breaking deployment totals despite reduced employment in recent years, and this was due in part to a rapid increase in the share of utility-scale deployment. Utility-scale installations represented 73 percent of all solar capacity installed in the U.S. in 2020, a record. Utility-scale solar has a much lower level of labor intensity than distributed solar installation (residential, commercial and community solar). The latter category accounts for more than half of all industry employment in the U.S.
If Auxin achieves a Pyrrhic victory in its quest for new tariffs, the resulting job losses will occur most notably in distributed solar and utility-scale solar installation and project development. Significant job gains in U.S. solar manufacturing will take years to be realized — if they come at all.
Natural Power is a global consultancy that supports its clients to deliver a wide range of renewable energy projects. Its independent engineering experience covers all phases of the project lifecycle, from feasibility through construction to operations, and all stages of the transaction. Learn more.