It seems like just about every other day, I come across a new report highlighting how great the solar industry is doing, both in the U.S. and globally. For example, the latest stats released by SEIA verify the U.S. market broke installation records by a wide margin in 2016 – a year during which the solar sector also accounted for one out of every 50 new jobs in the U.S., according to The Solar Foundation. In addition, Bloomberg New Energy Finance recently revised some of its global estimates, saying 2016 saw a record-setting 73 GW of solar capacity added worldwide. Those are all amazing and encouraging findings.
So then why is it that, over the past year or so, I’ve also covered news that some of the industry’s biggest players are streamlining their operations and, as a result, making significant layoffs?
The most recent announcement came in February from panel maker SolarWorld AG, which expects to reduce its headcount by about 400 employees as part of a larger plan to shut down production of its multicrystalline products and shift its focus to making high-efficiency monocrystalline technology.
Not long before that, in January, Enphase Energy and Mission Solar Energy both announced new rounds of layoffs. Micro-inverter provider Enphase revealed plans to cut about 18% of its global workforce, or about 75 jobs, in addition to the 11% reduction the company made last year. Meanwhile, Mission Solar Energy said it was laying off an additional 170 employees at its San Antonio plant, where the PV module supplier previously cut about 90 jobs when it decided to close the facility’s cell production line in October.
Before that, vertically integrated solar company SunPower eliminated a total of at least 3,500 jobs during two rounds of layoffs in 2016, namely by shuttering plants overseas. Toward the end of 2016, another vertically integrated solar firm, First Solar, revealed restructuring efforts that included plans to scrap its Series 5 modules, skip to producing its Series 6 platform, and cut more than 25% of its global workforce, or about 1,600 workers.
Each company, more or less, cited a need to remain competitive among market challenges.
At first, I considered these and similar announcements big red flags. Why were companies making such changes? Isn’t the solar market doing well?
In fact, I started writing a story a few months ago analyzing what seemed to be a new and concerning trend. After speaking to several industry experts, however, they assured me that the sky isn’t falling, that the solar sector has a long history of boom-and-bust cycles, and that companies have always adjusted – and will continue to adjust – to market conditions. In other words, my story was a non-story.
The reality check reminded me that, oh yeah, I’ve been covering news of layoffs and streamlining efforts for several years. Of course, job losses are serious and unfortunate, but these latest announcements weren’t rare and don’t necessarily portend darker clouds ahead for the solar industry.
Nonetheless, solar companies have been facing real problems worth noting. In the U.S., investor appetite all but dried up after SunEdison went bankrupt last year; the investment tax credit extension, though obviously a great policy win, had some unintended consequences, such as delayed project development and product demand; net metering has become a highly contentious issue throughout the country; and the future of federal backing remains unclear under the new Trump administration. Globally, there has been policy uncertainty in China and other regions, module oversupply, and intense pricing pressures, among other issues.
Make no mistake about it: The solar industry has always been volatile – after all, solar is combating conventional energy in a global arena and relies heavily on strong policy support – but the market, in general, is still doing well.