Solar jobs in California were down 14 percent in 2017, dragging down national numbers for the industry, according to an annual report.
Nationally, there was a 3.8 percent decline, marking the first year jobs have decreased since the survey was first released in 2010.
Among the reasons: 2016 was a banner year for the industry, the institution of time-of-use rates and concerns about solar tariffs.
The survey predicts a 5.2 percent increase in jobs in 2018.
Solar jobs in 2017 were down in California and the U.S. Here's the full story:
After experiencing consistent year-over-year growth, the number of jobs in the solar energy sector took a hit in 2017, with California absorbing the biggest blow.
Solar employment dropped 14 percent in California last year, which was largely responsible for a 3.8 percent decline nationwide, according to the National Solar Jobs Census released earlier this week.
It marks the first time jobs have dropped since the organization came out with its first annual report in 2010.
California lost 13,636 jobs in 2017, more than any other state.
"Being the biggest solar state, it's not surprising that California takes the biggest hit," said Ed Gilliland senior director for The Solar Foundation, a nonprofit based in Washington D.C. that supports solar energy adoption and releases the census each year.
California is home to about 40 percent of the country's solar capacity and employs almost eight times more solar workers than any other state.
Massachusetts saw a larger percentage drop in employment (21 percent) but California's sheer size relative to the solar market dragged the national numbers into negative territory.
The census results did not surprise Barry Cinnamon, CEO of San Jose-based Spice Solar, which specializes in residential installations.
"I'm definitely seeing a little bit of a slowdown from the standpoint of jobs for solar in California," he said.
Why solar numbers were down
One of the biggest reasons for the decline stemmed from the fact that 2016 was a banner year for the industry. Nationally, 51,000 solar jobs were added that year and California accounted for almost half of them.
New installations in the U.S. doubled from 7.5 gigawatts in 2015 to 15 gigawatts in 2016, in many cases from customers who feared Congress would get rid of the federal government's 30 percent tax credit for solar projects.
That led to a rush to sign up for projects before the end of the year. As it turned out, Congress extended the tax credit in December 2015 but many projects were already under contract for 2016.
Specific to California, last year's extremely wet winter also led to a reduction in installations.
"That puts a big crimp in the residential market, especially," Gilliland said, "because who wants to buy solar in the rain?"
Another reason for the turndown?
California utilities instituting what are called "Net Metering 2.0" rules that affect solar customers on the residential as well as the commercial side.
About 70 percent of the state's electricity is provided by investor-owned utilities such as San Diego Gas & Electric. Utilities are moving customers to time-of-use pricing to encourage consumers to run appliances and devices that consume a lot of energy -- such as air conditioners and washer/dryers -- when demands on the power grid are not as high.
The peak, or most expensive, rates occur in the evening.
Time-of-use rates affect solar customers because one of the primary reasons to install a solar system is to generate solar energy and sell any excess amounts back to the grid.
"If peak time shifts to the evening, that means when you're selling it in the afternoon you're not getting as good a rate," Gilliland said.
Yet another reason
The Solar Census was conducted in October and November, when the industry was very concerned about the Trump administration imposing tariffs on imports of solar modules, especially from Asia.
Two manufacturers called for the tariffs, saying the imports were unfair, but the U.S. solar industry in general was opposed to them, saying higher costs would hurt the domestic market.
President Trump had not made a ruling at the time the census was taken but 71 percent of the respondents said the pending case had already negatively impacted their businesses.
Last month, President Trump imposed four years of tariffs, starting at 30 percent and stepping down each year. The tariffs were not as bad as some in the solar industry had feared but they are expected to weigh on the sector -- especially on utility-scale projects because of their size.
2018 looks to be better, but ...
Despite the headwinds, the businesses taking part in the Solar Census projected job growth of 5.2 percent (263,293 jobs) for 2018, citing figures that indicate more growth for the industry in the long-term.
In the past five years, the solar workforce in the U.S. increased 110 percent (16 percent annually), adding 131,000 jobs.
Twenty-nine states reported increases in solar jobs in 2017. Utah, Minnesota, Arizona and New Jersey reported the largest gains.
"We could definitely be in some choppy waters over the next year or two but the states with strong policies and strong economics should continue to do well and continue to grow," Gilliland said.
Cinnamon, whose business took part in the Solar Census, said the prospects for small, local installers is still robust but the number of bigger installers is shrinking.
"Residential solar is inherently a local business," Cinnamon said. "When you're fixing up your house, getting a roof or upgrading your kitchen, you hire a local contractor because they give you the best customer service and best price. It's the same with solar."
Information for the census came from 2,389 establishments, of which The Solar Foundation said 77 percent "completed or substantially completed" the survey. The margin of error is plus or minus 1.25 percent for the national employment numbers.
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