A recent study released by the Tennessee Solar Institute (TSI) highlights the state’s growing solar value chain as one of the bright spots in Tennessee’s economy, but warns that Tennessee must remain diligent to avoid losing solar-related jobs and business opportunities to neighboring states.
The study details a well-diversified solar value chain, with installers, manufacturers, distributors and research and development companies all making up a significant share of the overall value chain. It also reveals that the value chain is made up of companies large and small, old and new, and with room to grow as Tennessee looks to take advantage of one of the fastest-growing markets in the world.
The study concludes that Tennessee’s solar industry is growing rapidly despite tough economic times and that Tennessee’s growing solar industry represents a genuine economic development opportunity for Tennessee. However, it wasn’t all good news. The study also found that specific workforce development needs must be met if the state’s solar sector is to keep growing and avoid losing opportunities to neighboring states.
TSI’s study also didn’t address the role that TVA and its 155 distributor utilities play in advancing the state’s solar value chain. They have a key role in providing market pull for the products and services that the solar value chain offers. Unfortunately, they seem to be pulling back on their commitment to solar even as the industry ramps up to meet growing demand.
The report, funded through the Tennessee Department of Economic and Community Development with Recovery Act allocations, represents the first comprehensive look at the state’s solar industry. The study’s goals were to detail the size and shape of Tennessee’s solar value chain and asses the sector’s workforce development needs moving forward.
TSI’s study reveals that the Tennessee solar value chain is made up of a diverse set of companies.
Businesses in the Solar Value Chain
Company size distribution
Nearly 30% of companies responding to TSI’s survey indicated they worked primarily in the solar installation sector. Another 27% operate in either the manufacturing or distribution of solar components. It’s a decent indication that Tennessee workers are out there installing Tennessee-made products, bringing multiple levels of economic benefits to the state.
In addition, the solar value chain is made up of a range of small, medium and large sized companies, but small companies (less than 100 employees) make up 78% of the total. This is a good sign because small companies employ half of all American workers and typically create 65% of new jobs. TSI data also suggests that while the majority of companies in Tennessee’s solar value chain are relatively new, a significant number of older, well established companies are also expanding their operations to take advantage of this rapidly growing sector.
Companies surveyed by TSI also identified several challenges to the continued growth of Tennessee’s solar value chain, including:
- Workforce development: Education and training to supply skilled workers is necessary to continue growing and keep up with evolving solar technologies and building standards;
- General business operations: increasing productivity, complying with various state and federal regulations, quality and risk management and strategic business planning were all areas identified by participants in the solar value chain as areas where assistance would be useful;
- Manufacturers’ training needs: Project management, safety training, supplier development training and inventory management training were all identified as areas where assistance would be helpful in the solar manufacturing sector.
These needs should fit squarely within Governor Haslems’ Jobs4TN program that is focused on helping existing Tennessee business increase productivity and expansion. Advanced manufacturing and energy technologies is one of the six target clusters identified by the Haslem administration as being a target for this program. Unfortunately, we have yet to see a strong public commitment from Governor Haslem to further develop the solar value chain as an economic driver here in Tennessee. Hopefully this study will provide him and his administration with the tools they need to aggressively position the state to take advantage of this opportunity.
The final piece of the puzzle, as I alluded to above, is TVA and its distributor community. Even as the solar value chain rapidly expands throughout the state, TVA has continued to scale back on its commitment to solar energy as a resource to meet future electricity demand. Without well-defined programs tailored to promote the widespread adoption of these technologies, Tennessee’s solar value chain faces an uncertain future.
Perhaps TSI put it best: “The solar energy industry represents a viable option to help put Tennesseans back to work and enable our workforce with 21st century skills. . . Tennessee is at a crossroads: Tennessee can either support opportunities for the solar energy supply chain, or concede solar industry growth to our neighbors.”
It’s time for the state, TVA and its distributors to recognize solar’s potential to drive economic growth and help meet future energy demand with clean, renewable energy. Tennessee can’t afford to leave opportunities like this on the table.