Solar Adding More Jobs (FSLR, SPWRA, STP)

The number of jobs in the US solar industry has risen by 6.8% year-over-year from August 2010 to August 2011. Over 100,000 people are now employed in making, selling, and installing solar systems in the US.

These figures come from a new report by The Solar Foundation and they indicate where the job growth is coming from and from where we can likely expect more growth. The report also contains a list of the top ten states in solar industry employment.

Perhaps the most interesting fact in the report is that just 24% of solar jobs are manufacturing related. The rest is around installation, sales, and R&D or project development. Some 52,500 jobs are classified as installation work, and those jobs are spread among more than 10,000 firms. Thus, the average solar installation firm employs around 5 people.

Solar manufacturing accounts for about 24,000 jobs, but this includes rack makers, glass makers, inverter makers, as well as module makers. Those 24,000 jobs are spread among 1,275 firms, making the average employment at each firm about less than 20.

One might fairly argue that the US solar industry is mainly a collection of small businesses with a few larger firms to beef up the numbers. And the two largest US-based solar makers — First Solar Inc. (NASDAQ: FSLR) and SunPower Corp. (NASDAQ: SPWRA) — don’t account for very many of the manufacturing jobs.

First Solar employs about 4,500 of its total workforce of 6,100 in manufacturing, but only about 500 in the US. The company employs about 3,400 manufacturing workers at its plants in Malaysia, and the rest at plants in Germany and Vietnam. First Solar also says it expects to hire as many as 4,800 workers at its new plant in Arizona, but the company’s falling stock price could spell a delay in construction.

SunPower employs about 5,150 people, only 700 of which are US-based. Most of SunPower’s manufacturing occurs in the Philippines, with more than 4,100 employees. China-based Suntech Power Holdings Co. Ltd. (NYSE: STP) manufacturers solar modules at its plant in Arizona, but expects to employ just 150 people there by the end of this year. Germany’s SolarWorld employs about 1,300 people in the US, most at their manufacturing plant in Oregon.  Oddly perhaps, SolarWorld’s US operation is the largest solar PV manufacturing in the US.

The Solar Foundation’s report emphasizes that the solar industry in the US is really a collection of small businesses that are mostly involved in installing solar systems. That’s not necessarily a bad thing, but it ought to put to rest any notion that solar manufacturing is ever going to be a major force in bringing new jobs to the US.

The solar jobs are going to small companies that install solar systems on homes and commercial buildings. The good news there is that financing rooftop solar installations has become far easier as the industry has begun to evolve innovative payment options for rooftop solar.

The not-so-good news is that the billions of dollars of federal loan guarantees and direct grants are not going to play a major role in directly creating permanent, new US jobs. Construction of the huge solar farms in US southwest will employ thousands of people during construction, but barely dozens once the plants are in full operation. Because the US needs more jobs now, more industrial scale solar jobs will help. But the development of small firms that install small solar systems are likely to have bigger impact on the US economy in the medium and longer terms.

Here is a list of the ten states with the most solar industry jobs according to The Solar Foundation report.