Minnesota Lawyer
TULSA, Okla. — Solar power continues to shine in the U.S. But adoption across the nation has grown in fits and starts.
The solar industry is experiencing rapid job growth, despite accounting for less than 1 percent of all consumed energy nationwide. U.S. employment in the solar industry grew 17 times faster than the American economy in 2016, with most of those jobs in installation, according to a report the International Renewable Energy Agency published in May.
“Falling costs and enabling policies have steadily driven up investment and employment in renewable energy worldwide since IRENA’s first annual assessment in 2012, when just over 7 million people were working in the sector,” IRENA Director-General Adnan Z. Amin wrote in a prepared statement. “In the last four years, for instance, the number of jobs in the solar and wind sectors combined has more than doubled.”
More than 260,000 people worked in the solar industry nationwide in 2016, with that figure expected to increase by 100,000 over the next five years.
Part of the increased interest in solar energy is due to a federal tax credit. Nationally, residential and commercial solar consumers can deduct 30 percent of the system installation costs from their federal income taxes. The investment tax credit was originally established as part of the Energy Policy Act of 2005. It was extended in December 2015 through 2021 as part of an effort to foster the solar industry’s growth.
Under the terms of the renewal, the tax credit drops to 26 percent in 2020 and down to 22 percent in 2021. Starting in 2022, only commercial users will be able to claim a 10-percent federal deduction.
That federal tax credit has helped facilitate the accelerated development of the solar industry, with 1.3 million installations that have a capacity of 42 gigawatts. The installation rate has grown by 60 percent annually since 2006, according to the Solar Energy Industries Association.
With a patchwork participation rate of state-level tax breaks, the solar industry’s expansion has not been at a uniform pace across the country.
Averaging less than five peak hours per day, Minnesota had nearly 340 megawatts of installed solar capacity in 2016, enough to power 49,000 homes and employ almost 3,000 people.
The state passed legislation in 2013 requiring investor-owned utilities to get at least 1.5 percent of electric power from solar sources by 2020. The state offers tax incentives for consumers who buy panels made in-state.
Oregon averages four hours per day of peak solar-generating capacity and has increased its installed capacity to 264.2 megawatts in 2017, up from 150 megawatts a year earlier. It has enough solar energy to power 33,000 homes and services several of the state’s largest retailers.
Oregon’s Department of Energy offers a tax credit for both homeowners and renters who install solar-powered roof panels, water heaters or space heaters. The incentive is scheduled to sunset in December.
Oklahoma, which averages more than five hours of peak solar energy generating capacity per day and ranks among the top 10 states for solar energy potential, has only 5.2 megawatts of solar energy panels installed statewide, accounting for 400 jobs.
The state saw a 526 percent increase from 2014, but it still ranks among the bottom five nationally for installed solar capacity.
Montelle Clark is the energy policy director of the Oklahoma Sustainability Network. He said the growth disparity is complicated and that in Oklahoma’s case, it’s partially a question of infrastructure priorities.
“We’ve had really abundant growth in wind, which is a positive,” he said. “Because we’ve got so much wind potential, it was initially much more affordable than solar and it came on faster.”
Oklahoma offers a 0.5-cent-per-kilowatt-hour tax credit for solar power generated by zero-emission facilities but it does not have any credits or rebates to offset solar panel installation costs.
Clark said he is bullish on the expansion of the solar industry in the state, despite the lack of tax incentives. Solar-generated electricity prices are dropping nationally, and the state’s largest electricity providers’ efforts are a sign that there may be more solar panels on the horizon, he said.
The state’s largest provider, Oklahoma Gas & Electric Co., operates a 2.5-megawatt solar farm near Mustang, Oklahoma, which currently has a waiting list for consumer participation. Public Service Co. of Oklahoma, the second-largest electricity provider, announced in 2016 a partnership with the University of Tulsa to light up the institution’s Case Tennis Center with a 300-kilowatt solar panel installation.
“The good thing about not being first is that we’re able to sit back, let those prices fall back,” Clark said. “That type of evaluation is happening with our major energy producers and state policymakers as they see that solar jobs are growing rapidly.”
