Saturday, March 17, 2012
SOLAR BUSINESS ALLIANCE
Solar Man Hours per Kw installed
H.3346 Job creation and economic development Bill
Andrew Streit 3/16/2012
Based on local, regional and national figures a baseline projection of jobs created through the passage of H.3346. If the credit is applied for then economic development and job creation MUST have occurred.
Where are the jobs?
Since 2009 a number of dedicated individuals have tried to bridge the gap between affordable conventional energy sources and future energy supplies that will support our economy. Our reasoning has always been based on facts and the reality of South Carolina’s economy. We have a 95% fossil fuel based economy and that will remain for the next generation. What we want to see is research and development into renewable energy that will lead to an “All of the above”, energy mix. This report is being put together for the sole purpose of developing a base line projection for job creation in the solar industry in SC.
The statistical data provided came from three local businesses, residing in SC and doing work in the region, one North Carolina Company doing business regionally and national statistics from Solar Energy Industries Association (SEIA), North Carolina Sustainable Energy Association (NCSEA) and the Department of Energy (DOE).
Meeting America’s Energy Demand
• The U.S. is projected by some analysts to become the world’s largest solar market by 2014.
• Solar is already the fastest growing energy sector in the U.S. and by 2014 it will likely be the largest source of new electric capacity in America.
• In 2010 and 2011 alone, 41 new U.S. solar manufacturing facilities began operations across America, including in Arizona, Georgia, Ohio, Michigan, Mississippi, Pennsylvania and Tennessee.
• Continued industry growth enhances our energy security and diversifies our domestic energy portfolio.
Industry studies completed on jobs created per MW installed the low was 3.18, the high was 48 and the average was 13 installation jobs and 14 related industry jobs per MW installed. Based on the current caps for the tax credit ($35m) the estimated amount of installs will be worth $100m of total investment over 5yrs.
Residential $15m =3.03MW installed and 24,240 man hours of construction work
18180 man hours of white collar work
Commercial $35m =8.86MW installed and 53,160 man hours of construction work
44,300 man hours of white collar work
Large Commercial $50m =16.94MW installed and 33,880 man hours of construction work;
67760 man hours of white collar work
Today’s Cost on Solar compared to 2006
The estimated amount of MW installed base on the incentive with cap is 29.1MW. This would lead to the creation of 783 man hour jobs at the end of 5yrs based on nationally compiled data.
The ramp up period will lead to these jobs being weighted much more heavily to the latter part of the 5yr period.
Based on the conservative man hour projections we know that 123.2 full time jobs will be created over the 5yr period or 24 per year.
However, if the credit passes we expect 24 jobs year one, 55 jobs year two, 96 jobs year three, 244 jobs in the fourth year and 364 in year five. Using these projections we estimate that 175 will be created at the end of the third full year of the tax credit, 2015 if the credit is fully utilized. The steep rise in year five is created because of expected increased demand as the credit sunsets but may lead to a curtailing of hiring or even lay-offs after the credit expires.
With every Kw of installed solar, there are jobs that will be impacted and benefited. The equipment must be manufactured, currently there are 4 companies identified in the direct manufacturing of solar equipment in South Carolina, Refusol, Bluestar Silicone, Optek and Velux. 3M, Bosch, Florian and others produce materials and equipment in their business that is part of the average solar install. SE, Old Dominion and other trucking companies have hubs located in SC. 29MW of panels alone would require 2891 semi-trucks to transport these goods. The average 3 man crew of installers spends $40 per day on food and beer while working at an installation and another $65 dollars per day on lodging.
The equipment must be delivered to the site, storage and tools are needed to do the work. Shops, restaurants and hotels will be used by workers. Lawyers, accountants, engineers and bankers will be involved in all installations to some degree. Ancillary benefits are hard to track but should be noted.
In conclusion, the only way the tax credit can be awarded is when a South Carolina company spends money on their infrastructure. This will create jobs and in turn tie the company to the location for an extended period.
The credit is more of a deferral on taxes during construction and should make the company more profitable going forward while planting a small seed for the growth of the solar industry.
The minimum number of jobs created thru man hours is 123 for a brand new industry to come to the state with the potential for 783 jobs if all of the economic benefits are utilized.