COVID-19 has hit the solar industry hard. With 25,000 American employees and $19 billion in annual infrastructure investments, the U.S. solar industry has enjoyed extraordinary growth over the past several years. However, with a plummeting economy and industry job figures, the COVID-19 crisis is threatening these solar jobs and critically important investments.
Issues from supply chain delays to tightening tax equity markets could lead to a loss of nearly half of the solar industry workforce in the United States over the coming months. Projections have industry losses down by 38% relative to forecasts.
Moreover, financing for solar through the tax equity markets – a core element of the solar investment tax credit – is drying up and there are billions of dollars of construction ready projects that may lose financing. Finally, this has the potential, in terms of the decrease in the number of gigawatts of solar energy deployed, to set back U.S. efforts to address climate change for years.
A recent report stated that nearly 600,000 jobs have been lost in the overall advanced energy industry – 17% of the total – in just eight short weeks. This has wiped out years of economic and job growth.
If you look closely at these devastating figures, beyond the impact on the economy and what this means for our efforts to improve the environment, we are talking about hundreds of thousands of blue-collar workers at small businesses who are now out of work.
Any truly forward-looking effort to support the energy sector must also include robust assistance for the growing renewable energy industry.
As Congress addresses upcoming legislation or a future phase of the Federal COVID-19 Stimulus Package, they need to act to alleviate the economic impacts of this pandemic, save jobs, and stabilize/ensure the long-term growth of the nation’s solar industry.
Extend the Solar Investment Tax Credit (SITC) at 30% for a period of three years – The SITC is one of the main reasons that solar power deployment has grown 10,000% since 2006. In order to maintain that trajectory during these challenging times, instead of beginning to phase it out, the SITC deadlines should be extended for a period of at least three years. Specifically, Congress should pass a multi-year extension of the Section 48 and Section 25D solar ITC and postpone the corresponding placed-in-service deadlines.
Enacted with bipartisan support, the SITC has a tremendous track record of spurring clean energy deployment across the country, creating nearly a quarter million well-paying jobs and driving down electricity costs for consumers, businesses and municipalities. It also has generated significant economic activity, accounting for $140 billion in private investment since its inception.
Consider a direct payment option for solar companies in lieu of the SITC – Companies are concerned about liquidity and staying solvent during this downturn. They are unable to finance their projects and keep workers employed. Give solar companies the option to have the money delivered as a direct payment right away, rather than a credit that appears during tax season.
Specifically, Congress should provide companies the option of receiving direct cash payments in lieu of taking advantage of the SITC for all qualified solar energy projects for the length of the SITC period. This would help address growing concerns on financing and allow solar companies to retain employees in anticipation of future growth.
Extend the “Safe Harbor” agreement – Manufacturing and shipping delays of SITC “safe harbor”-qualifying equipment and other equipment are putting at risk the tax credit qualification of projects currently under development and in construction. Congress must adjust SITC “safe harbor” deadlines to account for COVID-19 delays.
The concern in the solar industry as a result of this national pandemic is real. Inaction is not an option.
If Congress is serious about stabilizing the renewable energy industry and its employment numbers in the wake of this crisis, as well as creating new, good-paying jobs for the future economy, they must act now.
Congressional support for these three policy initiatives will give our workers and our industry the confidence they need to know that their jobs – and this industry – will be secure over the coming years.
Rob Kornahrens is the CEO of Advanced Green Technologies, Inc. and Advanced Roofing, Inc. Based out of Florida, both companies are award winning regional leaders in the solar and roofing industries.