Sun Smiling on Local Solar Industry
by Jennifer Moon
It looks like a bright, sunny day for Whatcom County’s solar industry. Solarize Whatcom, a campaign led by Sustainable Connections in partnership with three local solar businesses — Western Solar, Ecotech Solar, and itek Enåergy — recently concluded with impressive results. The goal was 20-30 contracts. The result was 47 installations.
Beginning in February, Solarize Whatcom offered educational workshops and urged local homeowners and businesses to install solar panels. The campaign included the incentive that, for every contract signed for a solar panel installation, a solar panel would be donated to the Bellingham Food Bank which would reduce that agency’s operating costs.
Marcus Virta, a system designer with Western Solar, estimates these systems will offset more than 410,000 pounds of carbon dioxide every year for more than 30 years. That equates to roughly 186 metric tons of carbon dioxide annually.
The three-month effort also brought significant economic benefits. According to Virta, over $1.2 million in “local money [was] spent on locally-manufactured solar equipment and services.”
As solar arrays appear on rooftops across the county, community solar is another option being embraced by some. Community solar helps those unable to install their own system to band together to invest in solar power. In partnership with the Port of Bellingham, itek Energy employees recently installed a community solar array at the waterfront, with component parts manufactured locally. According to itek, “Through the State’s Renewable Energy Production incentive, itek Energy employees will receive a yearly dividend from the solar energy produced for the life of the installation.” The production from this system is expected to approximate the amount of energy needed to power a dozen houses.
Ecotech Energy and Western Solar, both system designers and installers, and itek Energy, a panel and inverter manufacturer, have all seen tremendous growth in the past few years. Western Solar, for example, doubled its installed solar capacity between 2012 and 2014.As an in-state manufacturer of solar panels, itek, in particular, has benefited from the rapid growth in Washington’s solar industry. itek launched in 2011 with 15 employees. Today, it employs over 90 people. In 2015, itek products were the overwhelming choice of solar installers in the state.
These local growth trends are mirrored nationally. Over the past five years, the number of solar jobs in the U.S. doubled. In 2015, the solar industry generated 35,000 new jobs, a 20 percent increase in one year. The U.S. solar industry now employs more than 200,000 people. Growing solar demand and falling oil prices have upended the employment scene: estimates show the solar industry workforce now outnumbers that of oil rigs and gas fields.
The growth in our state’s solar industry has been aided by the Renewable Energy Production Incentive, enacted in 2005. This state incentive program, in combination with federal tax credits, has made the conversion to green power more affordable. Since its enactment, 10,000 homes and businesses in Washington have installed solar systems, creating 2,400 family wage jobs.
Still, the solar industry has its share of cloudy days. Perhaps the solar industry’s most significant challenges involve incentive policies and caps imposed by some state legislatures. For example, in Washington, there is a cap on incentive payments equal to the greater of $100,000 or 0.5 percent of local utilities’ taxable power sales. When incentive payouts approach the cap, payments to customers reduce. The incentive program had used only 30 percent of allocated funds in 2015, but Washington is now approaching the cap, and some utilities, including Puget Sound Energy, are expected to reach the cap in 2016.
The cap on incentives is a problem in other states as well. In Nevada, Elon Musk and his company, SolarCity, have been battling NV Energy, a utility owned by Warren Buffett’s Berkshire Hathaway. This conflict has also involved a cap, as well as rates paid to customers for net metering. New regulations passed last December benefiting NV Energy not only make it more costly to install solar panels but also impose costs on those who have already gone solar. SolarCity has laid off 550 of its Nevada workers as a result.
In our own state, the solar industry has worked to renew and revise the state’s incentive program for the past three years. In the past legislative session, this attempt took the form of House Bill 2346. In the end, the reform efforts failed for a third time, in large part due to the “Working Families Protection Clause,” a package of amendments introduced by Sen. Doug Ericksen (R-Ferndale). The amendment effectively held renewal and revision of the solar incentive program hostage to Gov. Jay Inslee abandoning a carbon cap. Sen. Andy Hill (R-Redmond) said House Bill 2346 failed due to a lack of funds for solar subsidies.
Meanwhile, U.S. oil and gas subsidies continue at an estimated annual cost of about $7 billion. A recent study of the economic benefit of the solar incentive program conducted by Western Washington University’s Center for Economic and Business Research found that “each incentive dollar leads to $6.82 in payroll in the state and $15.84 in purchases from local installers, manufacturers and suppliers.” As the solar production becomes more competitive, the cost of producing solar energy, including subsidies, is reaching parity with oil and gas. In some states, it has reportedly already crossed that threshold.
If there’s any “picking winners and losers” being done, one wonders which side is the winner and which the loser.
Jennifer Moon is an independent researcher and writer living in Whatcom County. She holds a Ph.D. in American history from the University of Virginia.