The Rec Agents Association released a new analysis and PR Blitz today, describing the enormous employment value of the Australian solar industry. Commissioned by Greenbank Environmental, I was lucky enough to be involved in this project and as usual spent my time trawling statistics, looking at sample data sets and trying to interpret what it all means.
We have been involved in a number of similar studies in recent years and have also bench marked Australia against other countries and it was great to get to work on updating this data set. What makes Australia so unique is that our market has been and will remain predominately small scale and residentially focused; and we currently only have one manufacturer of PV. The way Australia sells solar and thus the support industries needed are focused on high volumes of relatively low value transactions with just a few exceptions. We have a plethora (perhaps the biggest diversity?) of solar companies from Orwellian like call centres to the local solar installers and a load of mums and dads.
This new analysis sought to do three key things.
Updated and Forecasted
First we set out to update our data set based on our latest solar industry statistics. We constantly analyse accreditation levels, closures, bankruptcies and have sampled solar companies on multiple occasions. From this we were able to develop some metrics, adjust for time and changing industry segmentation to drive our models. We then drove yet more models of our recently completed industry forecasts. Is it perfect? Probably not. Forecasting and statistics are subject to input variables and the ABS doesn’t collect PV industry employment data explicitly. Are we confident in what it is saying? Absolutely.
In the absence of any more definitive data from the ABS and based on bench marking and the latest industry volume forecasts, we reckon its going to be very close to right. As a litmus test of what 21 years of hindsight can bring this type of exercise, last year our forecast for the Australian PV industry volume was within 2% of the final results.
So, its updated and matched to our latest forecasts, although like any analysis, is subject to input assumptions.
ABS comparisons
We also dug deep into a suite of ABS statistics on a wide range of other industries in an attempt to demonstrate the materiality of solar PV. Not only are millions of home owners involved but tens of thousands of employee’s across a raft of direct and indirect support. We are often lambasted as “niche” and compared to other sectors such as “the booming gas market” and yet we can clearly see that PV employee’s around five times as many people as “Gas supply” for example, going by the ABS dissection.
One journalist quizzed me this morning and upon learning about the rigor behind our direct and indirect employment calculations, commented that to his knowledge it was far more granular and real.
So we are material, we are a big employer and we have the potential to remain so – or not.
I was amazed that when we looked at 376 different employment sub categories, solar jobs was a long way from the bottom; in fact there are 227 employment subcategories (or 60% of all employee’s) who employ less people than the PV industry. And we are probably being conservative.
As an example of where we fit, there are :
- almost twice as many solar employee’s as “Engineers” in Australia.
- almost 3 times as many solar employee’s as “Precision Metal Trades Workers” or “Metal Trades Workers”
- almost 5 times as many solar employees as “Railway Track Workers”
Reassuringly, I also discovered that there is roughly 1 Psychologist for every 1 solar employee so at least we can be sure we are all sane.
The ramifications and stack
Of course the whole point of this exercise was to describe the ramifications of policy changes to solar jobs in Australia. Presently, there is a stack of potential changes that if combined (either positively or negatively) could literally cost thousands of jobs or ensure that we continue moderate growth. These are jobs that are in a growing industry which has already suffered from a swathe of cuts to support in recent years and yet, is a material employer and crucially, has has one of the highest growth rates of any employment sector in the country.
Sure, we need to adjust and stand on our own feet but don’t think for a minute that other industries don’t get support too. The same ABS data actually described some fascinating statistics related to other industries (I focused on other energy sectors like electricity, gas and coal). The data described how they got “Funding from government for operational costs” which was described as “Includes capital grants, and low interest or interest free loans made by government to businesses to encourage expenditure on specific equipment” worth almost $5Billion dollars between 2008 and 2012.
The single biggest impact on jobs is from changes or cuts to the RET which analyst after analyst keeps saying are not needed. I hope that this analysis adds just one set of facts about the materiality of the solar industry and serves to remind our leaders that there is an awful lot of peoples lively hoods at stake here.