Solar Photovoltaics Jobs & Value Added in Europe

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  • Solar PV Jobs & Value Added in Europe | 1

    Solar Photovoltaics Jobs & Value Added in EuropeNovember 2015

  • Solar PV Jobs & Value Added in Europe2 |

    This study is commissioned by SolarPower Europe.

  • Solar PV Jobs & Value Added in Europe | 3

    1. Introduction 4

    2. A Summary of Key Findings 8

    3. Total job creation 10

    4. Forces shaping the socio-economic effects of the Photovoltaics industry 14

    5. Rooftop and Ground-Mounted Photovoltaics systems 18

    6. Job impact and Gross Value Added per segment of the value chain 22

    7. The impact of Trade Defence Measures for Modules and Cells on the European Solar industry

    28

    Annex - Main sources and assumptions used in the model 32

  • Solar PV Jobs & Value Added in Europe4 |

    1. Introduction

  • Solar PV Jobs & Value Added in Europe | 5

    Objective of the study

    Solar power has undoubtedly been praised as a promising technology to address a number of important energy challenges for policymakers and society. Solar power is also recognized as an important contributor to economic growth within the European Union (EU). The highest advantage of the use of solar energy only becomes evident when all external factors such as job creation and Value Added are incorporated in a social impact analysis.

    The current study wants to contribute to the policy process by making credible data at a European level more available.

    The purpose of this study is to capture the socio-economic contribution of the solar power industry, by assessing its direct and indirect impact on job creation and Value Added (VA) in the EU - aggregated and per Member State. The analysis is split according to the solar power value chain - upstream and downstream.

    One key issue that impacts the EU solar sector relates to international trade. The EU has agreed with Chinese manufacturers on a minimum import price (MIP) and annual import quota for modules and cells in December 2013. The agreement would be valid for a two-year period, and is thus due to expire end of 2015.

    This study also assesses the impacts of the Minimum Import Prices (MIP) on employment in a targeted way, through modelling and comparing an alternative scenario without minimum import prices (MIP) with the baseline scenario, with the MIP, for 2 countries (Germany and Italy).

  • Solar PV Jobs & Value Added in Europe6 |

    Methodology

    The Input-Output model developed by EY allows assessing the socio-economic contribution of Renewable Energy Sources (RES) with regards to jobs and value added creation (direct and indirect) based on several input data.

    The direct impacts are generated by capital and operational expenditures (CAPEX and OPEX) required to build and operate solar power equipment. Additionally, annual and cumulative installed capacities as well as domestic shares are taken into account.

    Data is separated for each step of the solar power value chain and for rooftop (which includes residential, commercial and some industrial systems) and ground-mounted PV market segments. The indirect impacts are jobs supported by suppliers selling products or services to companies in the solar power value chain.

    Indirect impacts in each segment of the value chain are calculated using national input-output tables sourced from Eurostat, which represent the structure of national economies. Each of the CAPEX and OPEX segments of the PV value chain is assimilated to the best fitting sector. The expenditure in each segment of the value chain is thereby injected into the input-output table, which then enables measuring, on average, how that expenditure is re-spent across the suppliers of the PV industry.

    Scope

    Data is specifically gathered for the key solar power markets in the EU: Germany, France, Spain, Italy, Belgium, UK, Greece. Results for other EU countries are obtained by extrapolation.

    The analyses included crystalline-silicon (c-Si) and Thin-film (TF) technologies, which account for the largest share of the global PV market today.

    The timeframe for the analysis is 2008 to 2020. Taking into consideration that 95% of historical production occurred between 2007 (end of the polysilicon shortage) and today, 2008 is taken as the starting point for the study. 2020 is taken as an end-point for the forecasting, as too many uncertainties exist after that. Productivity gains to 2020 are reflected in unit costs.

    All assumptions used in the model are set in a conservative way. A list of the assumptions and main sources used in the model are detailed in the annex and discussed throughout the report.

    Break-out of the value chain

    The main products and services in the solar power lifecycle are captured in the value chain which is used in this model for gathering input data and presenting results. It starts with the raw material and module production and continues all the way to installation and operation. Equipment is integrated in the upstream value segments of relevance. Power sales are included in the downstream value segment.

    PV materials and equipment PV application

    Upstream Downstream

    Polysilicon Wafers Cells Modules Inverters Balance of SystemsEngineering,

    studies, adminstration

    InstallationOperation

    and Maintanance

    Power sales

  • Solar PV Jobs & Value Added in Europe | 7

  • Solar PV Jobs & Value Added in Europe8 |

    2. A Summary of Key Findings

  • Solar PV Jobs & Value Added in Europe | 9

    Although the European Photovoltaic sector has been severely challenged in terms of installed capacities and turnover since 2011-2012, the sector continues to prove its socio-economic value in Europe, both in terms of job creation and Gross Value Added (GVA).

    In 2014, the PV sector in Europe represented nearly 110.000 full-time Equivalents (FTEs) and more than 5.600M GVA created.

    By 2020 it is expected to sustain more than 136.000FTEs and to generate nearly 6.670M GVA on a European level.

    All countries, except the UK, had fewer jobs and a lower GVA in 2014 when comparing with the situation in 2011.

    Yearly installed capacities in the European countries clearly have a significant impact on job and GVA creation as there is a direct impact on less manufacturing and services needed.

    Only two countries (France and the UK) had significantly higher annually installed capacity in 2014 compared to 2008. Annually installed capacities from 2014 to 2020 are still expected to increase in all countries, although at a slower pace than before in the current scenario including trade defence measures.

    The average PV system price in Europe has decreased by 70% in 2014 compared to 2008. Although a lower unit cost makes PV systems more attractive, it also means less labor is needed for the same MW installed capacity. In addition, GVA decreases because a lower unit cost means fewer revenues per MW installed.

    Rooftop PV installations support almost 3 times as many jobs and GVA than Ground-Mounted installations. This can be explained by their installed capacities, unit cost per MW and labor needs for installation, maintenance and operations.

    Respectively 86% and 83% of the impact on jobs and GVA in 2014 is linked to the downstream activities of the PV value chain. Downstream activities of the PV value chain are more labor intensive than upstream activities. Particularly the sector of engineering, studies and administration shows less sensitivity to the downsizing of the PV market.

    The manufacturing of Balance of Systems (BoS) represent half of the upstream impact in jobs and GVA creation. In 2008, manufacturing of modules still created most of the upstream jobs, but this has clearly changed.

    Downstream, a strong growth for 2020 is expected of the share of Operations and Maintenance (O&M) in both jobs and GVA supported.

    An analysis of the impact of the expiry of the Minimum Import Prices (MIP) set by the EU on modules and cells imported in the EU, shows there would be positive employment effects throughout the PV value chain. The positive employment effects are higher downstream then upstream. This would be the result of a higher demand, following lower system prices.

    1. A large share of the jobs and of the value created by the PV industry are created in Europe.

    2. The declining trends observed in 2014 (compared to 2008) are expected to be reversed in the short term, with increased job creation and GVA in 2020 already.

    3. The removal of the MIP in December 2015 would have a positive effect on employment throughout the value chain in Europe. In such a scenario, 22,000 additional jobs could be created in Germany and Italy alone.

  • Solar PV Jobs & Value Added in Europe10 |

    3. Total job creation

  • Solar PV Jobs & Value Added in Europe | 11

    Capturing the socio-economic impact of the PV industry, both Gross Value Added (GVA) and jobs are calculated. GVA is the economic added value which is created when producing a good or providing a service (M). Jobs are the total amount of full-time equivalent (FTE) jobs created by the PV industry directly and indirectly. This study includes all market-relevant technologies, i.e. crystalline silicon and thin-film technology.

    Both direct and indirect jobs and GVA are included. Direct jobs and GVA are related to the PV industry specifically (e.g. manufacturing of PV modules, installation and maintenance of PV systems), while indirect jobs and GVA stem from supplying industries (e.g. transport, manufacturing of certain materials, professional services).

    Figure 1 shows that the level of jobs has declined in the EU solar sector since 2008 t