The Solar Industry May Soon Face a Skilled Labor Shortage

Growth of the Solar Industry

The growth of the solar industry may soon face the reality of not having enough skilled workers to satisfy demand, suggests a recent report by The Solar Foundation and the North American Board of Certified Energy Practitioners (NABCEP). Despite a dragging economy overall, installed solar capacity has increased dramatically in the past few years. In 2011 alone, the cumulative installed solar capacity in the United States nearly doubled from 2,095 MW to 3,950 MW. Should the industry continue along the base-line forecast, the National Renewable Energy Laboratory (NREL) forecasts that 75% of the U.S. solar market will attain grid-parity by 2015. This could unlock even higher levels of adoption and create a real distance between the demand and supply of solar installation professionals.

Solar Employment

The report suggests that this growth has been fueled by more than just government incentives; “evidence shows that a qualified, trained, and certified workforce performs installations that result in fewer problems at the time of inspection and, as such, have a direct impact on lowering costs for project developers, consumers, and inspection authorities.” Furthermore, as the industry matures, labor productivity increases and fewer employees are required per megawatt of equipment production or system installation, lowering the price further.

Workforce Training

If training has a direct influence on the price and continued growth of the industry, how can we make sure there is enough skilled labor to keep pace with rising demand for installations? Furthermore, how can we address the disproportionate levels of entry-level workers and start to supply the market with candidates that have experience, trade or apprentice work, skill-specific solar training, and industry certifications? Who will train all these new workers and where will the money come from?

To date, the U.S. government has been a considerable source of funding for solar workforce training, especially through loans, grants, and contracts made under the American Recovery and Reinvestment Act (ARRA). From 2009 to 2012, the Department of Energy (DOE) and Department of Labor (DOL) invested $60 million in workforce development. But these funds are running out, as well as those for state and local Workforce Development Organizations (WDOs) and Workforce Investment Boards (WIBs), which have a poor track record of raising the necessary non-public funds to permanently improve internal processes and develop sustainable business models.

Other Approaches

In the absence of significant public investment, innovative solutions will have to be developed sustain the level of solar energy training of the past 4 years. Fortunately, it is in the best interest of the private solar industry to maintain a healthy level of skilled labor moving forward. Still, this will likely require a public-private partnership of one form or another. The report suggests three ways in which the current training infrastructure could be adapted to utilize scarce public resources and maximize inclusion of private funding.

The first suggestion is a classic private-public partnership where WDOs and WIBs would establish a line of capital or loans for solar companies in their area to support solar workforce development. Funds would be distributed for training in exchange for a ‘matching placement’ commitment to hire newly trained workers. This solution relies heavily on a standardized curriculum and certification process toensure a certain level of quality for the hiring companies. It would also help WDOs and WIBs maximize the efficiency with which existing state and federal funds are allocated, eventually shifting local workforce development organizations and companies from their reliance on publicly-funded programs toward a privately-funded system.

Another suggestion would be a revolving loan system in which companies would voluntarily enter into a contract designed to collect nominal fees or assessments from industry participants and leverage the money to support workforce training programs. The report suggests that these funds would be leveraged from a premium on solar installations on a per-watt basis. It states that a 3-5kW system (the average size for a single-family home) would capitalize the revolving loan fund for as little as $22.50 - $37.50 per installation and, with full industry participation, would provide $25 million in workforce funding per year.

The final suggestion is an online ‘crowd sourcing’ forum in which training providers would arrange training sessions across the nation, but classes will only be scheduled once a certain enrollment threshold has been met. Once scheduled, funds collected from enrollees at the time of registration would be matched with industry funds. Originally developed on the Groupon.com model, this method would represent the fastest system for responding directly to market needs driven by engaged community participation.

None of these are meant to be prescriptive, but it is clear that a discussion must be had between the solar industry, the training infrastructure and public agencies on how to avoid a massive gap in the available labor to support rising demand for solar installations. The success and sustainability of these proposals will be determined by the level of participation and dialogue between the various stakeholders.

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Tags: development, government, incentives, solar, training, workforce

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