The energy sector has had a rough six months, and with gas at multi-year lows, the oil & gas industry is experiencing a major downturn, announcing layoffs around the country as drilling activity slows. But there are bright spots in energy if you know where to look.
Solar companies are reporting incredible job growth as the cost of solar energy becomes more competitive with the grid and companies feverishly expand to exploit the opportunity. It could be the start of a decade-long shift of jobs away from fossil fuels to creating energy from the abundance of sunlight that hits the earth every day.
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Growing at 20 times the broader economy The Solar Foundation's National Solar Jobs Census 2014 was released last week, and it showed that solar industry jobs grew 21.8% from a year ago in November to 173,807 -- it's a relatively small base, but it's 20 times faster than the national average growth rate of 1.1%. Over the next year, another 36,289 employees are expected to be added.
Source: The Solar Foundation.
The growth is coming from an incredible expansion in solar installation. Projects as small as a few kW are going up on rooftops around the country, and solar power plants as large as 500 MW are being built in the deserts of the southwestern U.S. You can see below that installations have grown steadily since 2010, a trend that should continue in the future.
Source: GTM Research.
Most of the jobs are putting solar projects together, but even those jobs are fairly high paying. And in the next few years, even solar manufacturing may make a move back to the U.S.
Where the jobs areSolarCity and Vivint Solar are both indicative of the kind of jobs being added in the solar industry. Most of their staff is in either sales or installation of solar panels. According to the report, 97,031, or 56%, of all solar jobs are in installation, and 20,185 are in sales and distribution.
Manufacturing and project development account for 32,490 and 15,112 jobs, respectively, but manufacturing may grow in coming years. SolarCity is building a solar panel manufacturing plant in New York, and SunPower has hinted that it would like to expand domestic production as well. Solar panels aren't cheap to ship around the world, so building product close to demand makes a lot of sense, helping the domestic jobs picture.
Another interesting note from the report is that solar workers are becoming increasingly efficient and installations are growing faster than solar jobs. In 2014, there were 15.5 workers for each 1 MW installed, down from 19.5 workers per MW in 2012. Although, that sounds bad for jobs, in the big picture, efficiency further helps solar compete on cost with other forms of energy -- which ultimately creates more jobs.
How much do solar jobs pay? According to the Solar Foundation, solar industry jobs are fairly high paying as well. Below is an overview of hourly wages in the industry depending on job type.
Source: The Solar Foundation.
But before you start thinking the solar industry will grow forever, there could be a major speed bump ahead.
What about 2017? In 2017, the investment tax credit expires. This federal incentive gives a tax credit for 30% of a solar system's cost, and when combined with accelerated depreciation rules, half of a system's costs can be recouped in the first year. If this tax credit is reduced to 10%, as planned, the industry's growth could halt temporarily, or even lose jobs in 2017.
While 2017 could be a speed bump, the long-term prognosis for solar jobs in the U.S. is very strong. Solar energy is now competitive with electricity pricesin 42 of the 50 largest cities in the U.S. and it's increasingly competitive with fossil fuels on a utility scale around the country. As costs go down and the price of electricity from fossil fuels go up, the industry will continue to grow, and it may eventually be the largest energy industry in the country. At these growth rates, it's just a matter of time.
The article Searching for a Job? The Solar Industry Might Be Your Best Bet originally appeared on Fool.com.
Travis Hoiumis long shares of SunPower. The Motley Fool recommends SolarCity. The Motley Fool owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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