The solar power industry has been hammered by the pandemic economy with the loss of tens of thousands of jobs nationally and Colorado facing an estimated 2,400 solar jobs gone by June. Yet one niche market is fitfully soldiering on in the state: home rooftop solar.
Thanks to a strong start in 2020, some installers had built up a pipeline of jobs, though some customers have decided to defer installations. And after a sharp drop in new sales in March and early April there has been a small rebound.
“We are surprised how many customers have been interested, we have been making sales,” said Blake Jones, co-founder of Boulder-based Namasté Solar.
A key to the rooftop market’s buoyancy was the decision by Gov. Jared Polis to include installers among essential services that could continue to operate during the state’s stay-at-home order, which was aimed at limiting the impact of the COVID-19, the illness caused by the coronavirus.
“The Polis administration did what we needed them to do and the utilities have been good partners continuing connections,” said Mike Kruger, executive director of the Colorado Solar and Storage Association (COSSA), an industry trade group.
“It has been worse for commercial and industrial folks,” Kruger said. Commercial and industrial “are all just hoarding cash.” Projects are facing months of delays, he said.
Kruger also noted that while some home solar projects have been deferred, few have been canceled.
To be sure, the market still has its pitfalls. There have been some furloughs and firings, and some companies are completing installation faster than the pipeline is being refilled.
“Colorado has always been a really strong market for us,” said Jeff Lee, executive vice president for sales at Orem, Utah-based Blue Raven Solar, which operates in 14 states. “We had a big pipeline of jobs, but we have definitely decreased our weeks of capacity by a month and a half.”
“The real key is when do we start seeing business resume and people restore traditional patterns of life?” Lee said. “If it takes six months it will definitely have an impact. … It’s a timing game.”
Jones agreed. “If sales continue to decline, the queue will shrink in four months with greater impact.”
Kruger said there have been several hundred layoffs in the sector, although the impact has varied by installer and the geographical market they serve.
Namasté, with a workforce of about 200, for example, let go 15% of its employees and furloughed another 15%, Jones said. After getting federal paycheck protection aid, the company was able to bring back all of the furloughed workers.
Sunrun, the largest rooftop solar installer in the U.S., with operations in 22 states and headquarters in San Francisco and Denver, cut its door-to-door sales force to concentrate on online sales.
“We had to do some furloughing,” said Ann Hoskin, Sunrun’s chief policy officer. “Now we are working our way to bring some of those folks back.” She declined to say how many jobs have been lost at Sunrun in Colorado.
Blue Raven Solar has not cut jobs. It usually has eight crews working in Colorado, but has had to shift some installation teams to out-of-state jobs, Lee said.
Still, the cuts and shuffling stand in contrast to the turmoil in the overall solar power sector where 65,000 jobs have been slashed since the end of February and the job losses, over the projected targets, will reach 114,000 by June, according to the Solar Energy Industries Association (SEIA), a national trade group.
This will leave about 188,000 people employed in the sector. “These losses would negate five years of solar industry growth, pushing the workforce back to a level not seen since 2014,” SEIA said
Colorado is projected to have job losses of 2,387 through June, equal to a 42% decline in the workforce.
A number of analysts – including Bloomberg New Energy Finance, IHS Markit and the International Energy Agency – have put the global decline in megawatts of solar installations at 12% to 18% for the year.
The forecast for residential and small commercial installation may be double that. Forecasts for the decline in rooftop sales in the U.S. in the second quarter of 2020 range from 30% to 50%, Sunrun CEO Lynn Jurich said during a May 6 call with analysts and investors. Sunrun aimed to be at the low end of that range, Jurich said.
Against this backdrop the Colorado market has chugged along, though not without missteps and misfires.
When local government buildings shut down so did permitting and inspections. “‘The biggest issue has been the building departments closing for eight weeks,” said David Raichart, co-founder and president of sales for Broomfield-based Photon Brothers. “That was tough.”
Construction slowed by 40% and then Photon Brothers ran out of permits, Raichart said.
“That was the initial speed bump,” Kruger said. “There is a balkanized permitting system. You had, for example, Commerce City, which required a physical copy of the permit application be dropped off, but the office was closed.”
Jones said “inspectors weren’t coming out to inspect projects and you can’t do your final billing until it is inspected.”
The City of Aurora already had digital filing for permits, but it wasn’t until the end of March that the City of Boulder had added an online permitting process, Hoskins said.
“Broadly, we fixed it,” Kruger said. “We convinced many jurisdictions to take scanned email forms.” Emailed video and photos were also sent to inspectors for their OK.
One upside from the turmoil could be to speed the development of online permitting and inspections, one of the most time-consuming and cumbersome parts of installing solar arrays, Hoskins said.
The same could be said of sales. “The way we’ve done it in the past was sitting down at people’s kitchen tables with proposals. Now we are using the internet and Zoom,” Hoskin said.
In her conference call with analysts, Jurich said the pandemic has sped up a transition that was slowly taking place and that companies that can make the switch will fare better.
After seeing overall sales drop 40%, Sunrun has seen steady improvement including a record day for sales, which were all made online, in April, Jurich said.
The story is similar for some of the Colorado installers.
Raichart said Photon Brothers typically sells 60 to 70 systems a month and is now at 40 a month, but that interest has returned for solar and also for home storage batteries. “We’ve done a lot of marketing in that space,” he said.
For the moment there have been no staff reductions as the company has been able to shift crews to southern Colorado. “In Pueblo we are crushing it,” Raichart said, with more than a 30% increase in activity.
This was helped by the fact that the City of Pueblo did not shut its building department, he said.
Still, if sales do not return to normal it may lead to staff reductions, Raichart said. A 20% decline in revenue could translate to a 15% cut in staff, about five positions.
Blue Raven Solar installs per month have dropped from 165 in February to a projected 120 for May, Lee said. In part reflecting the permitting problems. “We lost some jobs because we couldn’t get permits,” he said. Still, the company has close to two months of projects in its pipeline.
And while a solar array is an expensive proposition – around $25,000 for a 5-kilowatt system – it is seen as a money saver, particularly when twinned with a home battery and with interest rates so low financing may be appealing to many homeowners.
“Home solar may be countercyclical; we saw this in 2008,” Hoskin said.
Namasté did 1,100 residential projects in 2019, and this year the company had one of its best first quarters ever, Jones said.
“We are feeling grateful, we are doing projects, we have been making sales. But what happens going forward? Will sales slow down if more people are laid off?” Jones asked. “What if there is another surge of the virus and it starts all over again?
“It is definitely a glass half full,” Jones said. “We are certainly better off than restaurants, and we are grateful for that.”
UPDATED: This story was updated at 1:34 p.m. on May 27, 2020, to modify Colorado Solar and Storage Association Executive Director Mike Kruger’s assessment of the commercial and industrial solar market.