Trends in the renewable energy sector that you need to know
While cost increases and supply chain delays have extended into the new year, overall growth is expected for the renewable energy sector in 2023. This positive outlook is fueled by growing demand for environmentally friendly solutions all across the country. Most importantly, the Inflation Reduction Act (IRA) calls for $370 billion in incentives and subsidies for clean energy initiatives which will accelerate solar development and deployment.
As rollout of this historic climate and energy investment begins, PeopleReady Skilled Trades offers a preview of the renewable energy trends that companies may see as the year unfolds.
Trend #1: The Inflation Reduction Act will be the catalyst for record industry growth
Renewable energy is poised for record growth over the next several years. The overall cost efficiency that solar power provides along with the financial incentives from the IRA will boost large-scale solar projects. Meanwhile, businesses serving commercial or residential clients can expect greater demand for clean energy solutions as well.
The ongoing expansion of utility-scale and community solar projects
Many U.S. cities and states are adopting community solar projects at a rate higher than most renewable energy trends predicted. Community solar farms are generally smaller than 50 acres and are considered subscription-based distributed assets. This model allows customers to buy or lease a portion of solar panels from a local, off-site community solar array. In turn, they receive monthly credits on their electric bill from the energy generated by their panels.
Even more significant growth will come from utility-scale projects, with SEIA noting that there are 10,000 installations already active or currently planned throughout the U.S. These projects are larger than 100 acres, and often built over unproductive farmland, industrial sites and repurposed landfills, as noted by PVMagazine. Utility-scale projects can also be privately owned or purchased by corporations. Each project is connected to the grid by a transmission line or through a substation, allowing it to transfer energy across longer distances.
As reported by The Solar Energy Industries Association (SEIA), utility-scale projects provide energy at a price that will remain stable for decades. This can lead to high marketplace demand, especially in periods when fossil fuels are at their most expensive. The U.S. currently has 70.3 GW in solar energy capacity and 85.2 GW in onshore wind capacity. According to Rystad Energy, the IRA’s record-breaking investment will add another 155.5 GW by 2030. This will create a greater need for more plants and workers to build and operate them.
Increased demand from residential and commercial consumers
A study by the U.S. Energy Information Administration shares that one-quarter of all electrical generation will come from renewable energy in 2024. More specifically, the share of electrical generation from wind and solar sources will rise from 21% in 2021 to 26% in 2024. Two big factors: residential and commercial solar installation growth.
According to CleanTechnica, residential solar demand is up 35% year over year due to the impact of increasing power outages along with greater electricity demands. CleanTechnica’s article also notes that private sector companies invested a record $10 billion in clean energy in 2022, driven by extensive tax credits with direct payment options. The IRA has expanded the available credits and added further incentives for other renewables, which should fuel significant investments in 2023 and beyond.
Renewable energy trends in commercial solar are also positive. SEIA notes that installations were up 3% year over year in 2022. Additionally, the SEIA’s follow-up study projects a 7% annual increase in commercial solar use due to the IRA through 2027.
Emphasis on good-paying jobs that are supported by training
A recent study from the Political Economy Research Institute (PERI) approximates that the IRA will generate 912,000 jobs each year over the bill’s 10-year lifespan. With such a high number of jobs being created, career pathways and support systems will be critical for developing a talent pipeline.
According to American Progress, new roles will be supported with training programs, making entry into the industry easier. Additionally, the bill has provisions for apprenticeships and prevailing wages to incentivize workers to join and stay in the industry. However, given the rapid project rollout, businesses may not have the bandwidth to attract, hire and onboard candidates while also ensuring compliance with the bill’s provisions. Partnering with a renewable energy staffing company like PeopleReady Skilled Trades can help reduce the administrative burden and provide you with the IRA-compliant workforce you need.
Trend #2: Inflation and supply chain issues remain difficult to navigate
The majority of clean components are manufactured in China. However, ongoing trade restrictions, tariffs, and the country’s former zero-COVID policy created supply chain issues that have proven difficult to navigate. The geopolitical situation in Ukraine is also causing supply chain disruptions, leading to uncertainty and project delays.
While these market trends negatively impact the renewable energy sector, solutions are on the horizon. For example, the Buy American rule aims to increase domestic manufacturing, which would make component shipping faster and cheaper for businesses. A more diverse supply chain with foreign and domestic sources can reduce overreliance while increasing options in case of shortages, delays or emergencies. According to the Center for Strategic and International Studies, supply chain diversification can also help save companies on expenditures.
Meanwhile, inflation remains a concern in many industries, including renewable energy. While it’s expected to remain higher than average for some time, the inflation rate should continue easing in the year ahead, according to a new Kiplinger forecast. Additionally, the Inflation Reduction Act contains measures to decrease the deficit and lower costs for businesses — ultimately slowing inflation.
Trend #3: With future growth, renewable energy will require an influx of skilled workers
According to Department of Energy data from PeopleReady’s report, “2022 U.S. Jobs Data and Trends Shaping the Future of Work,” over 17,000 new solar jobs were created with significant growth from the previous year. However, the ongoing renewable energy staffing shortage has made it difficult to source qualified skilled workers. Meanwhile, there are few workers with the skills needed to meet increasing marketplace demands.
As the IRA takes effect, there is expected to be a greater need for workers on the manufacturing side to meet consumer demand. While apprenticeships create a strong solar staffing pipeline, The National Law Review notes that the renewable energy staffing shortage may extend into these programs as well. This aligns with the trend of younger workers opting for white-collar jobs rather than a career in skilled trades.
As a result, renewable energy companies are seeking creative solar staffing solutions. Many of these companies have developed partnerships with local community groups and trade associations to help expand their reach. Others have built relationships with local high schools and colleges to recruit or hire these skilled workers while they’re still studying or immediately upon graduation.
However, these efforts are time-consuming and costly. To be more productive in their recruiting efforts, clean energy businesses can partner with renewable energy staffing companies who already have connections with job seekers in their local communities. Additionally, they can provide customized solar staffing solutions to make navigating this growing industry — and the complex workforce guidelines of the IRA — much easier.
HOW PEOPLEREADY SKILLED TRADES PROVIDES THE RENEWABLE ENERGY STAFFING SOLUTIONS YOU NEED
The renewable energy sector will become increasingly competitive as consumer demand grows. Partnering with an experienced renewable energy staffing company will not only ease the challenge of finding specialized skilled tradespeople to fill energy roles but will also help you devise an overall hiring strategy customized to your project locations.
PeopleReady Skilled Trades is the only renewable energy staffing partner you need — whenever or wherever your next project arises. We have over 600 locations throughout the U.S., helping you overcome worker shortages and hire local residents to meet or exceed state requirements. If the local labor pool isn’t enough, our large roster of traveling solar workers can be dispatched throughout the country at a moment’s notice.
When you combine that with our in-house construction laborer apprenticeship program, certified payroll and national recruiting teams, and our more than 22 GW of solar installed, you’ll quickly see we can provide you with the best renewable energy workforce. Whether it’s a single worker or hundreds of workers across several locations, PeopleReady Skilled Trades can get you the IRA-compliant workforce you need.
We can provide skilled tradespeople, including:
- Solar installers
- Heavy equipment operators
- Health and safety coordinators
- Electricians
- Welders
- And more
