IBISWorld

Solar Costs Shrink, Employment Rises – For Now

IBISWorldIBISWorld released a study this week that says the prices of solar panels installation decreased 18.3 percent during 2016.

The study said that prices will drop still further in 2017, but at only a 4.4 percent rate. One reason that the category is hot is the prospect of rougher seas ahead, the press release says:

IBISWorld expects the first scheduled reduction in the business energy investment tax credit (ITC) at the end of 2019 to cause a flurry of solar panel installations during the next three years as buyers take advantage of the current 30.0% credit. Despite an uptick in demand, the overall falling price of PV panels will allow suppliers to offer lower rates for installation services.

The end of the ITC is not the only thing driving prices down, according to IBIS World Business Research Analyst Sean Windle. “The solar investment tax credit is a driver, but not necessarily the key driver,” Windle wrote in response to emailed questions from Energy Manager Today. “Falling PV panel prices are the main thing luring more buyers off the sidelines to install solar capacity and lower long-term energy bills.  Additionally, now the that the tax credit has been extended, nonresidential developers don’t have to rush as  much to get projects off the ground to take advantage of it.”

The firm said that price volatility will remain high during the next three years, which will make budgeting difficult. Windle added that residential are outperforming commercial installations. “That is partly due to faster overall growth in residential building activity, as well as declining corporate profit,” he wrote.

The shrinking costs almost certainly are responsible, at least partly, for the increase in solar jobs. The 2017 Employment and Energy report from the Department of Energy (DoE) says that solar now employs twice as many people as the coal industry, according to Forbes. The Solar Foundation, the story says, says that the solar industry added 73,615 jobs last year. That is more than oil, coal and natural gas combined. Solar accounted for 2 percent of all new jobs created last year.

The Solar Foundation added that sales people in the field earn an average of $45 per hour and installers $26 per hour.

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