Solar Expands to the East Coast

Is this a Clearing of the Solar Jobs Eclipse?

By Kris Vann
San Francisco, February 21, 2011

As US solar panel manufacturers moved thousands of jobs to East Asia last year despite US efforts to subsidize the industry, a large US solar installation company expanded its mainly West Coast-based operations to the East Coast last week. This move signals a strong vote of confidence in the solar installation market and in the solar jobs outlook for 2011. Standard and Poor’s estimates that the United States will experience at least a 60% increase in solar installations this year.

Last week, SolarCity announced its acquisition of groSolar’s residential solar installation division, the largest solar installer on the East Coast with operations in Massachusetts, New York, New Jersey, and Pennsylvania. This follows SolarCity’s recent acquisition of Clean Currents Solar, with operations in Maryland and Washington D.C., bringing the company’s operations to 21 locations. Even with the flurry of expansion activity, SolarCity CEO Lyndon Rive says that the company is cash flow positive.

“We are predicting growth for 2011 in the US,” said Rive. “We hired over 500 people last year.” He says that the company has doubled the number of its employees each year since 2008 and that their revenue scales to the number of people they have. “We have to get on the local level in solar installations. We can’t outsource to China. The work is delivered locally, so that means local jobs.” He says that the company plans to add to its workforce in 2011.

Other solar installation companies have also announced recent expansion plans. In mid-December, Sungevity, an Oakland, Calif. solar installer, announced that it had raised a $15 million round of funding to further finance its rapid growth. Sungevity, with operations in Arizona, California and Colorado, affirmed that it will use its recent funding to expand to the East Coast. Last month, Solar Universe raised $7.0 million and also plans to expand across the United States.

What seems to be driving the growth is not just economies of scale, but financial innovation. SolarCity’s Rive said, “quite frankly we wanted to get into the East Coast earlier, but the financial markets put a constraint in our growth.” With SolarCity’s ability to raise over $700 million in financing from partners such as Citi, this is no longer a constraint. Earlier this year, US Bank created a $24 million tax equity fund for Sungevity. This type of financing allows companies to offer solar consumers leasing options for solar installation, with zero down and a monthly payment that may be lower than an average electricity bill.

As these companies expand jobs locally in the race to be the nation’s “go to” brand in solar leasing and installation, solar panel manufacturers continue to face competitive pressures to move jobs abroad. However, some manufacturers like SolarWorld, with over 1,000 employees mainly in its Hillsboro, Oregon plant, are staying put and betting on the “Buy America” provision in the $725 billion military appropriations law requiring the Defense Department to buy U.S.-made solar panels.

Despite continued competition from Asia, the US solar industry can expect job growth over the next 12 months to be 26%, representing nearly 24,000 new jobs added to the existing 93,502 solar workers. This data is based on the National Solar Jobs Census 2010 , a study conducted by non-profit organization The Solar Foundation with assistance from Cornell University. This expected growth rate is significantly higher than the U.S. economy-wide expectation of 2% growth over the same period … perhaps a much needed break in what was once a murky solar forecast.

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