Solar’s Bright Future Could Depend on Government Policy

  • Steve Peplin, CEO of Talan Products in Cleveland. His company manufactures metal parts for the solar industry. Photo: Julie Grant

September 4, 2015

At Talan Products in Cleveland, workers take huge coils of metal and stamp or shape them into all kinds of components: the small metal pieces in coffee makers and truck transmissions; brackets and bars for building construction. But increasingly, Talan’s been making parts for the solar industry. They don’t make the panels; they make the parts that keep the panels in place.

“First off, you have to hold those panels on the roof. You have to mount them on something. We make the mounting systems,” says Talan’s gregarious CEO Steve Peplin.

Smiling under his thick mustache, you can tell he’s excited about this new part of the business. And it’s growing fast. Peplin says five years ago, solar accounted for only 3 percent of the company’s business. This year, it was 18 percent. And Peplin says Talan plans to hire 75 new employees in the next few years in production, engineering and purchasing.

“We’re a high-growth company, but solar is the engine of our growth now,” he says.

Talan’s not alone. A census of the industry found that solar jobs are growing along with the growing demand for solar power.

“We’re expecting it to employ more than 200,000 people next year,” says Rick Umoff of the Solar Energy Industries Association, a trade group.

That’s twice what it was a decade ago. And this growth in solar is happening against the backdrop of job losses in other parts of the energy economy—namely, in the coal industry, which has lost 50,000 jobs in the past five years, according to one study. In fact, there are now more than twice as many jobs in the solar industry as in coal.

Fracking, and the resulting low-cost electricity from natural gas, is one reason coal has been hit particularly hard. Clean air regulations are another. And most recently, President Obama’s push to tackle climate change by reducing carbon dioxide emissions from coal-fired power plants, could also contribute to more contraction in the coal industry.

Total employment estimates from 2008–2012 for each industry analyzed. Of the four industries, only the coal industry experienced job losses. Natural gas added the most jobs. Solar and wind jobs were grouped together and account for an increase of roughly 79,000 jobs over the timer frame analyzed. Combining the sectors yields a net increase of 124,184 jobs over the 5-year period. Graphic courtesy Lincoln Pratson, Duke University.

Total employment estimates from 2008–2012 for each industry analyzed. Of the four industries, only the coal industry experienced job losses. Natural gas added the most jobs. Solar and wind jobs were grouped together and account for an increase of roughly 79,000 jobs over the timer frame analyzed. Combining the sectors yields a net increase of 124,184 jobs over the 5-year period. Graphic courtesy Lincoln Pratson, Duke University.

But the dark days for coal look like good times for solar. And government policies—both state and federal—have been at the heart of solar’s ascendance.

The federal government has provided tax credits for solar projects. And many states have renewable energy mandates, which require utilities to purchase a small percentage of power from solar, wind and other renewable sources—even if it’s more expensive.

These are choices the government has made to jump start the solar industry. But solar advocates worry their momentum is in jeopardy. There’s pushback from the fossil fuel lobby, and many solar-friendly policies are being overturned.

“We have to ensure that we do not set up rules that favor one source of generation over the other and lose these critical facilities,” says Todd Schneider, a spokesman for FirstEnergy, an Akron, Ohio-based utility. FirstEnergy relies heavily on coal-fired power plants. And they’re not fans of the renewable energy subsidies.

Schneider says Ohio needs its coal-burning power plants to keep the lights on when the sun doesn’t shine or the wind doesn’t blow. But his company closed the last of three coal plants along Lake Erie this year. He said the costs of meeting new clean air standards were simply too high.

FirstEnergy also led a successful push to freeze Ohio’s renewable energy mandates. Rick Umoff of the Solar Energy Industries Association says before the freeze, Ohio was considered a solar-friendly state. That’s not the case anymore.

“It’s fallen significantly in the rankings—from one of the larger solar states to one of the smaller states. And that has a direct impact on jobs,” he says.

Umoff says Ohio has about 430 solar industry jobs, compared with 3000 in neighboring Pennsylvania. Instead of embracing solar, Ohio has joined West Virginia, Michigan and other states in fighting President Obama’s Clean Power Plan. The plan, which limits carbon emissions from coal-fired power plants and encourages renewables, could impact the solar industry.

Umoff says states that embrace the Clean Power Plan—instead of fighting it—can benefit from new solar businesses and jobs. But it takes time to set up any new industry.

“[As] you start to have supply chains set up, customers start to be aware that the industry is there, in the state, so customer acquisition costs go down. And suddenly, the cost of the technology and the cost of using renewables falls really fast,” Umoff says.

Back at Talan Products plant in Cleveland, CEO Steve Peplin says most of the solar parts they manufacture are shipped to New England or to the southwest. He doesn’t quite get why Ohio isn’t pushing for new solar jobs. But his bigger concern is federal policy: The solar tax credit is scheduled to expire at the end of next year. It’s a deadline the solar industry is dreading.

“I think all the industry is asking for is just a little more transition time [to] try to avoid this solar cliff that we’re facing,” he says.

Peplin says companies like his can keep creating jobs. But instead of falling off the subsidy cliff, he wants the government to provide a gentle slope to help the industry.