Our friends over at The Solar Foundation have just released their latest National Solar Jobs Census for 2016 and the results (as the infographic on the right demonstrates) are truly eye-popping! Here’s our take.
While there was a great deal of talk about creating decent jobs for American workers during the past election campaign, the reality is that the solar industry is one of the most dynamic creator of jobs that cannot be sent overseas! In fact, according to the Census, one out of every fifty jobs added in the United States during 2016 was created by the solar industry. Moreover, 2016 was the fourth year in a row in which job growth exceeded 20%, year-on-year!
The 260,000 people employed by the solar industry represent more workers than in the natural gas industry, over twice as many as in coal, over three times that of wind energy, and almost five times the number employed in nuclear. Only the oil/petroleum industry is ahead, but likely not for long. (And seriously, who wouldn’t prefer to go to work in the solar industry than into the hell that is a coal mine?)
Compared to other high tech entities, the solar industry in the U.S. accounts for more jobs than Google, Facebook, and Microsoft combined—worldwide! Nowhere is that job growth more explosive than right here in California, with solar jobs increasing by a staggering 32% from 75,598 in 2015 to 100,050 in 2016! Moreover, these are good paying jobs, with the median salary for solar installers coming in at $25.96 per hour.
The solar industry has reached these levels thanks to the very hard work of many people who strive to make the industry better every day, and thanks to solar-friendly policies at both the state and federal levels. Policy makers, from the President on down, should keep that in mind as they contemplate changes to energy policy. Today, more than ever, Solar Means Jobs!
Check out The Solar Foundation’s cool video highlighting some of the many exciting developments in the solar industry!
Being a full-service solar company means, in part, that from time-to-time we are asked to step in and fix a system that is no longer operational and the original installation company is long gone. Or the installer is still around, but the client was so annoyed by the sales/installation process that they don’t want to have anything to do with the company anymore. We even get calls from clients who are pretty sure that their system is working, but the way the install went - excessive delays, mismatched parts, or just an overall sloppy look - has left them with an uneasy feeling, and they want a second set of eyes to come out and give them peace of mind. All in a day’s work and we are happy to help.
But lately we have come across a different situation: the system is fine, but the financing is burdensome. Now we aren’t talking about leases or PPA’s here - we’ve outlined at length our views on those. No, these are credit-worthy folks who are feeling trapped by their high-interest solar PACE loan. PACE, as you may recall, stands for Property Assessed Clean Energy, and it allows homeowners with less than stellar credit to qualify for a loan to improve the energy efficiency of their home, including by adding solar. PACE financing is not tied to the homeowner’s personal credit, and the debt “runs with the land” as part of the property tax assessment (hence the name).
Lots of solar installation companies love PACE because it is easy for them to find out in advance whether the prospective client is likely to qualify - and if they have equity in the home and are up to date on their mortgage and property tax payments they almost certainly will, and for far more than the cost of a solar system. The paperwork is handled electronically, funding decisions are fast, and there are no “dealer fees” - points, really, that often are charged back to the client.
So what’s not to love?
In a word, the interest rate. At a time when Home Equity Lines of Credit (HELOCs) are readily available and at interest rates often below 4%, PACE loans can be double that or more depending on the term! That means on a 10-year loan to finance a $20,000 solar system, the PACE borrower could pay as much as $6,500 more over the life of the loan. Ouch!
Let’s be perfectly clear: PACE is a great program for people looking to lower their energy bills but who don’t have great credit. Their annual savings from installing solar or other PACE-funded improvements will regularly exceed the cost of the loan, providing real value to them. But if you are a homeowner with great credit, you shouldn’t let yourself get stuck with an unduly expensive loan, just because some solar sales guy thought PACE would make his life easier!
If that is the situation you are in, shop around. See if you can qualify for a HELOC to pay off your PACE loan - you might learn that a simple switch will greatly increase your solar savings!
As Run on Sun rings in the new year and looks forward to a great 2017, we have some big news of changes taking place on our team. Our Projects Coordinator / Solar Ninja, Laurel, has moved to Oregon to spread the joys of solar power in her home state. She wanted to share some final thoughts with her Run on Sun solar family…
Just over two years ago I made a flash decision that would change my career trajectory in a bigger way than I ever could have imagined. I came to Los Angeles after earning my Masters in Global Public Health. While I’ve always been passionate about solutions to environment and health, I hadn’t ever thought about working in the solar industry for perhaps obvious reasons (EVERYONE asks me how I started in solar with a public health background). After a few months living in LA without finding health work, I met someone at a green event who worked for a solar company. That encounter got me thinking about the fact that there is so much sun in Los Angeles but the air pollution is literally in your face every day. I realized that PV Solar provides an incredible opportunity to work towards something of real value for people, the environment, and for broader global health reducing the impacts of burning fossil fuels. So I took a chance and after doing a little research into who was working in my nearby vicinity (avoiding commuting in LA was a big priority) and who was doing solar for the right reasons… I contacted Jim Jenal at Run on Sun. I told Jim I was happy to schlep materials around the county, handle paperwork, answer phones, and do whatever it took to get more solar into our community if he would just teach me all about the industry. I didn’t realize quite how far that deal would go. You see, one of Jim’s past lives was as a high school teacher and despite the small size of his company he is considered one of the thought leaders in the solar industry, largely through this blog.
Over the next two years he taught me everything there is to know about running a solar installation company. Its not very often that one is given the opportunity to learn every aspect of an industry with an employer who gives you the confidence and tools you need to grow exponentially in a short period of time. I ate it all up! After a year I was wearing as many hats as one can imagine in a solar installation business… Inside Sales, Lead Developer, Site Assessor, Project Designer, Project Coordinator, Safety and Health Officer, Marketing Manager, Solar Blog Writer, Boom Lift Operator and of course Solar Installer. That’s when I made my own business cards with my new self-proclaimed title - “Solar Ninja".
Working with Velvet, Ralph, Josh, Robert, and Jim on Run on Sun’s team was more empowering and satisfying than I ever imagined working in a for-profit field could be. I was helping people to reduce their impact on the environment, lower their costs, and show their neighbors that renewable energy is a real solution everyone can be a part of. I learned that, counter to popular belief, a sales person could be honest, forthright, and down to earth. I learned that we could run our business with integrity and give people quality 20+ year products they could trust. I learned that people who want to go solar are some of the coolest people and really makes sales work a joy. And more than anything else, I learned that I wanted to stay in this exciting industry that was growing and improving exponentially before my eyes.
It was with the support of Jim Jenal and all the know-how he bestowed upon me that I was able to earn my PV Solar Technical Sales Professional certification through NABCEP. And I was offered an exciting position managing a new solar installation branch in Bend, Oregon for a forward-thinking solar company, Elemental Energy. Elemental even has a non-profit arm called Twende, installing off-grid systems in developing countries around the world! So this truly is a dream job combining my Global Health and Solar Ninja skills into one awesome adventure!
I am sad to be saying goodbye both to the Run on Sun team and all the wonderful clients I worked with over my tenure which we fondly refer to as our Run on Sun family. Though the sun is setting on my time in Southern California, the sun is shining bright (everything is literally whitewashed with snow currently) in Bend! I look forward to hearing how things continue to grow with Run on Sun. If ever you or someone you know finds yourself with property that needs to be solarized in Central Oregon I’d love to hear from you!
Thank you for reading my humble Thoughts on Solar! Much love and sunshine for all — Laurel
All solar companies market themselves, Run on Sun included. But lately we’ve come across some particularly puzzling ploys being touted by some companies as if they were a benefit to the consumer, when all they really are is a way for the solar company to cut their costs at the consumer’s expense! Let’s peel back the onion layers on these three ploys to see what is really going on…
One of the major solar companies built its entire business model around this ploy, and a bunch of aggregator sites have popped up offering much the same thing: a quote on a solar power system without ever visiting the consumer’s home. Certainly for some folks - the very busy or the very shy - this might sound appealing. You can get a quote for your system without ever having to deal with those pushy salespeople.
The advantage to the solar company should be pretty obvious - they avoid the time and expense of sending a vehicle and a salesperson to your home, thereby saving the salesperson for only those potential clients where a face-to-face meeting is required.
So how does this ploy cost consumers? The simple truth is that no one can properly install a solar system without actually coming to your home and seeing the actual conditions on the ground. While satellite images are great for making preliminary assessments, there is just too much that could affect the ultimate cost of the system that cannot be determined remotely. For example, the other day we noticed a sag in a roof while taking our measurements. Upon closer inspection it was discovered that one of the roof rafters was split and caused the roof to sag. That damaged rafter needs to be repaired or replaced before solar can be safely installed. The homeowner was completely unaware of the situation until we pointed it out to him.
When a solar company gives you a quote without having performed a comprehensive site evaluation, their quote will be hedged as “preliminary, subject to revision following engineering review." Which means that after you sign the contract, they will “discover” the issues that they should have told you about initially. But now you will have signed a contract and to move the project forward you will have to accept a change order increasing your cost. Great deal for the solar company, not so much for the consumer.
This one to me is a real head scratcher - the solar company that brags that they will install solar on your home in one day! Seriously?
Solar power systems, when installed correctly, should provide you with trouble-free operation for twenty years. Given that time frame, do you as a consumer really care whether the install takes one day or four? Frankly, in ten years of doing this, we have never had a client ask if we could complete the installation in one day.
Of course, that doesn’t mean that clients aren’t concerned about how the installation will be done, they are. But they are interested in knowing that it will be done right, and right the first time.
The solar company promoting this ploy wants to suggest that they have this so dialed in that it will take them no time at all. But what is really happening is that they are telling their crews to throw it up on the roof and move on to the next job. That translates into lower labor costs for the solar company (i.e., more money in their pocket), but no real benefit for the consumer.
The simple truth is that craftsmanship takes time. You, the solar consumer, are going to be living with this for the next twenty years - maybe that extra day or two will actually inure to your favor!
This may be the scammiest ploy of all. The solar company prominently displays that they will install solar on your home for free! And who doesn’t love free, right?
Of course what this really means is that the solar company wants you to sign on to a 20+ year agreement (either a lease or a Power Purchase Agreement) to pay them every month for the privilege of having that “free” solar on your roof. The end result is that you end up paying as much as twice as much to that solar company as you would have if you had purchased the system outright - and you still won’t own it even after twenty years!
And yes, I know that not everyone has the cash on hand to purchase a system outright, but there are better options than leasing. For consumers with good credit, a home equity line of credit will be way cheaper than going with a solar lease. If your credit is not so great, you could look into PACE financing which is not tied to personal credit. PACE is more expensive that a HELOC, but still a better deal than a solar lease.
At the end of the day, all of these ploys work in the solar company’s financial interests, and not the consumer’s. The folks that dream up these schemes are shrewd - consumers need to be just as shrewd if they are to avoid getting fleeced!
Happy New Year!
When deciding to invest in a photovoltaic solar system one of the first questions everyone has is how to finance the cost. While solar continues to be a great long-term investment, with payback periods often in the 4-7 year range, the hefty outlay is more than many homeowners feel comfortable fronting. Hence, the concept of the zero-down solar lease financing model and third-party system ownership (TPO) was born. While SunRun invented the model in 2007, the three behemoth national solar companies - SolarCity, Vivint Solar, and SunRun - rose to the top over the last five years due to the popularity and ease of the model for customers. Until this year, nearly 100% of Vivint Solar’s business was with solar leases and power purchase agreements (PPA’s).
However, as we at Run on Sun point out to all of our potential clients and in various blog posts, solar leases are simply a bad deal. And, what do you know, finally the wider public seems to be coming around to this fact! GTM’s recent report, “US Residential Solar Financing 2016-2021“, showed that for the first time since 2011, direct ownership of residential solar systems will surpass third-party ownership in 2017. The solar lease has been rapidly decreasing in popularity since it peaked in 2014 with 72% of the market. GTM predicts that in 2017 55% of residential solar systems will be bought outright through cash or loans, and the trend will continue with 72% of all systems sold owned directly by 2021.
GTM Research: Residential TPO Penetration and Installations by Ownership Type, 2011-2021
There are several factors at play in this shift. The total cost to go solar has declined rapidly in recent years meaning the upfront cost continues to be less frightening. Today there are more attractive solar loan options available to homeowners as well. One popular option in California is the PACE (Property Assessed Clean Energy) government loan program which is repaid as an assessment on the homeowners property tax bill. Mosaic is another solar loan program available nationally. While loans do have interest rates and dealer fees to be aware of, the benefits of owning a system outright far outweigh the costs of third party ownership - such as financially damning escalator clauses, the inability to take the tax credit or local rebates, and the risk of selling your home to buyers who don’t qualify for (or want) the solar lease.
Overall growth of the solar industry is also beginning to slow this year. After growing at more than 50% annually for the last four years, the residential market is expected to see a slower growth rate of 16% this year. The report shows that growth has slowed among all solar installation companies, but much more so for the top three national companies who previously relied upon the popularity of the solar lease. For the first time since 2013, these three will together install less than half the market’s solar systems as their growth slows to just 12%. By contrast, growth among the remaining solar power installation market will slow to 36% according to GTM. It will be interesting to see how the “big three” handle this shift in the coming years.
One thing to note is that while growth is slowing among the largest companies, solar continues to grow overall. Smaller local companies have always offered, and preferred, to sell systems outright rather than through leases and these companies are becoming more popular as more research shows the true value of ownership vs leasing. As one of those companies, we have always stood by the data and educate all our clients on the realities of financing options as the last thing we want is to be in the business of locking people into a twenty-year-long bad deal! Curious as to the specifics of leasing vs owning? Check out our blog from almost two years ago: Top Five Reasons to Stay Away from that Solar Lease!
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