Solar in the State of the Union: A Closer Look

In his State of the Union address last Tuesday night, President Obama reiterated the importance of maintaining a strong national commitment to developing our country’s clean energy resources. For a few brief moments, solar and wind energy received presidential praise under the national spotlight provided by such a high profile speech. With only 60 minutes to chart out the path forward for an entire nation, the President was unable to offer much detail on the renewable energy successes mentioned in his speech. Below, we take the opportunity to explore in greater detail the points made by Mr. Obama.

“We have doubled the distance our cars will go on a gallon of gas, and the amount of renewable energy we generate from sources like wind and solar — with tens of thousands of good American jobs to show for it.”

The solar industry is expanding rapidly, adding jobs faster than the overall economy for the third year in a row. According to The Solar Foundation’s National Solar Jobs Census, the solar industry now employs nearly 120,000 solar workers (defined as those who spend at least 50% of their time supporting solar-related activities). In the 12 month study period covered by this report, 1 out of every 230 new jobs in the U.S. economy was a solar job. The installation sector accounts for nearly half of these jobs (57,177) and a quarter of these opportunities are in manufacturing (29,742). The solar industry also supports jobs in sales and distribution, project development, and “other” jobs (in research and development, finance and accounting, legal work, and other ancillary services). The latest Census report found that employers attribute continued industry growth to falling solar equipment prices, state policy support, and federal consumer tax incentives.

“Solar energy gets cheaper by the year — let’s drive down costs even further.”

President Obama is also correct that solar prices have fallen rapidly over the past several years. Since the beginning of 2010, the national capacity-weighted average installed cost for solar has dropped by 44%.* As you can see in the graph below, the utility market segment has led this price plunge, with costs dropping by half in three years. Prices for residential and non-residential systems have dropped by 25% and 34%, respectively, over the same period. It is the goal of the U.S. Department of Energy’s SunShot Initiative that price declines continue for the remainder of the decade, hopefully reaching installed system costs as low as $1/watt.

CostChart 02.18.2013

Chart based on data from GTM Research/Solar Energy Industries Association “Solar Market Insight” reports

“Last year, wind energy added nearly half of all new power capacity in America.”

This statement is based on data published by the Federal Energy Regulatory Commission (FERC) in their monthly “Energy Infrastructure Update” report. While this report tells a great story for wind, it also helps demonstrate recent growth in new solar capacity. According to the FERC, 5.6% of new generation in 2012 came from solar, meaning that solar accounts for 1 in 20 megawatts (MW) of new energy generation. New installed solar capacity in 2012 alone is enough to power over 250,000 American homes.

Fortunately for us, the solar industry is poised to continue its growth and expansion into new areas of the country as federal, state, and local efforts to support the industry continue. It is to this end that the Solar Outreach Partnership works to provide local governments with resources and best practices they can use to help build strong local solar markets, as well as complimentary technical assistance to communities seeking individualized guidance to reduce local barriers to solar.

*Data taken from GTM Research/Solar Energy Industries Association’s quarterly Solar Market Insight reports, published between Q1 2010 and Q3 2012.