Solar employment drops off in wake of tariffs - Albuquerque Journal

Solar employment drops off in wake of tariffs

Picuris Pueblo last year installed a 1-megawatt solar array. Growth has slowed, and employment in the industry has fallen over the past year. (Eddie Moore/Albuquerque Journal)

Picuris Pueblo last year installed a 1-megawatt solar array. Growth has slowed, and employment in the industry has fallen over the past year. (Eddie Moore/Albuquerque Journal)

Federal tariffs on solar cell imports and shifting market dynamics have markedly slowed industry growth over the past two years, nationally and in New Mexico.

Solar employment nationwide fell by 3.2 percent last year, down about 8,000 jobs, according to the Washington, D.C.-based Solar Foundation’s annual Solar Jobs Census, released in February. New Mexico was hit particularly hard, losing 354 jobs, or 14 percent of its workforce, according to a state-by-state follow-up analysis the foundation published last week.

All told, solar employment statewide has plummeted by 26 percent since 2016, from a peak of about 2,930 people that year to about 2,170 in December.

Industry leaders generally blame a 30 percent tariff that President Donald Trump slapped on imports from China and other Asian countries in January 2018.

Prices began climbing when the government first considered tariffs in summer 2017, and many developers froze projects, said Ryan Centerwall, CEO of Albuquerque-based Affordable Solar.

“After the tariffs were implemented, pricing rose by about 35 percent,” Centerwall said. “We lost about half the business in our pipeline because of it.”

Tariffs on steel and other products from China have further aggravated things, said Ron Corrio, founder of Albuquerque-based Array Technologies, which makes and sells solar trackers worldwide.

“We source components off-shore, so it affects prices for our products,” Corrio said.

Price hikes have also hurt residential rooftop businesses, which already face challenges in building demand among middle- and lower-income households as higher-income markets begin to level off.

In New Mexico, consumers also lost a 10 percent state income tax credit for solar systems in 2016, making pricing even more challenging here, said Taiyoko Sadewic, co-founder and president of statewide installer Positive Energy Solar, which closed its Las Cruces office last year and cut its workforce from about 85 to 65.

The nationwide growth rate for residential solar declined 15 percent in 2017, according to U.S. Solar Market Insight, published quarterly by the Solar Energy Industries Association. Overall, the industry installed 10.6 gigawatts of utility-scale, commercial, and residential systems in 2018, down from 14.8 GW in 2016.

Still, solar markets could significantly rebound this year and beyond, since tariffs are now ratcheting down by 5 percentage points annually through 2021, and will disappear in 2022.

In addition, a federal 30 percent solar tax credit for consumers and businesses will start declining by 4 percentage points per year in 2020, disappearing after 2022. That’s expected to drive demand among consumers and businesses who want to access the credit before it goes away.

Affordable Solar said it’s experiencing a new boom in business since January. It expects to ramp up from about 90 employees now to about 130 by the end of the year.

“We’re expecting about 300 percent growth this year,” Centerwall said. “By the end of April, we expect to surpass our revenue for all of 2018.”

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