Creating Opportunities for Good Jobs in Distributed Solar
This is the second blog post on construction jobs in the solar industry.
Our previous blog post, Are Solar Energy Jobs Good Jobs?, pointed out that not all solar jobs are good jobs. We also referenced research indicating that net metering policies disproportionately subsidize rooftop solar. We argued that we should be clear about the societal benefits, including job quality, of the policies supporting solar development. While the purpose of that blog post was to highlight the gap between rooftop solar job quality and utility-scale job quality, the purpose of this post is to identify strategies and policy mechanisms that can make all solar jobs good.
Policy makers have confirmed a commitment to a mix of utility-scale and distributed solar. Here we define distributed as inclusive of rooftop but also anything under 20 MW. While interest groups find many reasons to favor one over another, each has advantages and each can be made better. Utility-scale solar farms can be – and are being – built on less sensitive lands, and small-scale solar can be more equitably distributed than it has been to date and create better jobs. Four strategies identified below describe policy opportunities for improving job quality in the distributed solar market.
- Utilize state-certified apprentices in the distributed solar market.
Currently, utility-scale solar jobs are better than many distributed solar jobs because of the way jobs and training are structured. Utility-scale solar workers receive training in a broad set of skills required for a skilled trade such as electrician, iron worker, carpenter, or other craft. The contractors and workers on utility-scale solar, as well as other large construction and public works projects, usually participate in state-certified apprenticeship programs. In contrast, distributed solar jobs are generally stand-alone jobs where workers come with basic construction experience and training is limited to the specific skills of the job.
In construction, apprenticeship is the gold standard for training—superior to more specific solar installer training programs, because it results in a pool of highly-skilled workers who can earn a middle class career in the construction industry, rather than just in solar, which is a small subset of the construction industry. Apprenticeship is a regulated, earn-while-you-learn, multi-year training system that includes a clear wage ladder as skills and experience are acquired – so career advancement is built into the system.
Apprenticeship programs accept, each year, only as many trainees as are needed to meet projected demand for their labor. As a demand-driven training program, apprenticeship avoids the pitfalls often associated with workforce development: training more people than there are jobs. Policies that encourage more solar projects to utilize state-registered apprentices will create more openings for workers who can obtain middle-class careers in the industry. In addition, when combined with strong pre-apprenticeship programs and targeted hire agreements, these strategies can broaden career track job opportunities in disadvantaged communities.
- Develop policies that encourage public works distributed solar projects.
Public policy design and implementation can encourage activity and growth in certain markets. For example, net metering policy (even without the California Solar Initiative incentives) has spurred the rooftop industry by effectively subsidizing rooftop solar generation by compensating solar project owners at retail rates. The renewables portfolio standard (RPS), a mandate, has spurred the growth of large-scale solar.
Policies—which can be, but don’t have to be direct grants or subsidies—could encourage the development of distributed solar on public works projects (as defined in Section 1720 of the California Labor Code), such as Municipal, University, School, and Hospital buildings or publicly subsidized multi-family affordable housing. This would not only ensure that the beneficiaries of California’s solar investments are the public at-large rather than the higher-income segment of the population (as is the case with current net metering), but also that the investments create good jobs, since contractors working on public works projects must pay prevailing wages and utilize apprentices for a minimum percentage of work hours. Encouraging public works renewable energy projects can ensure public benefits, including good jobs, of distributed solar.
One good example of this type of effort is Proposition 39, which directs up to $550 million annually for five years to energy efficiency and clean energy projects for K-12 public schools and community colleges. To participate in this program, public works contractors and subcontractors are required to meet upfront minimum qualifications and register with the state Department of Industrial Relations to bid on or perform work on a public works project. Contractors must maintain certified payroll records for work performed on public works, the Labor Commissioner’s Office is responsible for compliance, and the California Workforce Development Board will report outcomes for the actual construction jobs created from this program.
- Aggregate small solar projects into larger programs and establish upfront labor standards for participating contractors.
There are hundreds of contractors competing for rooftop solar installation jobs in California. Innovative business models, aggressive marketing, efficient operations are increasingly required to compete in the rooftop solar market, and each project is unique—requiring a contract between the solar installer and the homeowner. If policy makers wanted to influence job quality, one approach would be to establish an incentive program requiring participating contractors to pre-qualify. Contractor pre-qualification makes participation in a program contingent upon meeting certain criteria and following a set of principles and practices. Participating contractors are willing to agree to the terms and conditions, which may include a wage standard, skill standard, and/or local hire targets, because of the benefits that program participation provides to their business, such as reduced marketing expenses or more work.
Some energy efficiency programs have adopted this model with great success. One example is Clean Energy Works Oregon (CEWO), a residential retrofit program that established a pool of participating contractors required to meet minimum criteria including: a high-road agreement with labor standards for participating workers and contractors, including a wage floor and targeted and local hiring provisions. (Read more about CEWO on pages 85-88 here).
Another example is Sierra Nevada Energy Watch, a partnership between PG&E and the Sierra Business Council to provide energy efficiency services in 14 Sierra Nevada and northern Central Valley counties within PG&E territory. SNEW created a network of local contractors for its in-house Direct Install program, whereby participating contractors agreed to pay their electricians at least $35 per hour and ensure that trainees and helpers were also paid living wages of $17 per hour and encouraging them to participate in state-certified apprenticeship. (Read more about SNEW on pages 76-78 here). SNEW has been successful in exceeding its energy savings and cost effectiveness goals year after year.
- Promote utility-procured distributed generation where workers or contractors are subject to labor standards.
Utility ownership of rooftop solar is an approach being implemented across the country that offers opportunities for ensuring family-supporting, career-track solar jobs because utilities can use in-house unionized labor or require labor standards for their third party contractors. Two examples of utility-owned distributed solar are Arizona Public Service and CPS Energy in San Antonio, which contract with third-parties to install rooftop solar.
Community shared solar is another version of this approach. Programs already up and running include Tucson Electric Power’s Bright Tucson Community Solar program and the Sacramento Municipal Utility District SolarShares program.
One example of a community solar program that would use in-house, union labor is the proposed program at the Los Angeles Department of Water and Power (LADWP). This program will be based on LADWP’s successful Utility Pre-Craft Trainee (UPCT) program, currently used for its weatherization program (read more here). The UPCT program is an earn-and-learn, pre-apprenticeship in which entry-level trainees work full time retrofitting homes and small businesses while learning skills and preparing for civil service exams and career opportunities in the utility and in the skilled trades. The program includes a wage standard of $16 per hour plus health benefits. RePower LA, a broad coalition of environmentalists, community groups, and labor, strongly supports the UPCT program and the establishment of a community solar program at LADWP.
The strategies and examples discussed here offer just a few approaches for improving distributed solar jobs. By increasing the demand for apprenticeship labor, investing in public works, requiring contractor pre-qualification for aggregated projects, or leveraging utility-procured distributed solar, policymakers and program implementers can close the gap in job quality between the distributed and utility-scale segments of the solar industry.