Employment slides in green energy technology manufacturing

The once-booming solar photovoltaic (PV) manufacturing sector (which produces solar panels and cells) has seen its fortunes dive in recent years.

In the 2000s, the industry flourished, recording growth levels in global capacity of 58% annually between 2007 and 2011.

This expansion was largely driven by state subsidies, which have since been pared back. In addition, global competition, from China especially, has driven down prices. These two factors have triggered a crisis in the industry, leading to a scaling back of production and sharp job losses. 

German job losses

The latest issue of Eurofound's ERM quarterly highlights the situation in Germany, which dominates the industry in Europe. At its peak in 2008, Germany accounted for one-fifth of global production of PV panels and cells.

Problems of global overcapacity and uncertainty about state financial support, however, have cost thousands of jobs since 2011. Between early 2012 and early 2013, employment in the sector in Germany dropped from 10,196 to 5,973.

The case of solar panel manufacturer Solon is illustrative. In March this year, the company announced that it would be relocating its headquarters to the United Arab Emirates (UAE) and closing its remaining facilities in Germany, with the loss of 230 jobs.

The company had been an industry success story; founded in 1996, it had sales of €815 million in 2008 and employed nearly 1,000 people in Germany, France, Italy and the US. However, it filed for bankruptcy in 2011 and was later acquired by UAE-based Microsol.

R&D potential

The job-creation potential of the greening of the economy has given rise to much optimism. However, renewables equipment manufacturing is not likely to be a major part of this picture, as production has clearly shifted to Asian competitors. Job growth in this sector in Europe is more likely to be concentrated in R&D, installation and maintenance.

The outlook for the renewable energy sector as a whole nevertheless remains upbeat. The European Commission’s Employment and Social Developments in Europe 2013 notes that the renewable energy employment share in energy production is expected to rise from 19% in 2010 to 32% by 2020.

Green energy is more labour intensive than the traditional fossil-fuel energy sector, implying that the replacement of fossil-based energy by green energy will result in a net increase in employment.

For a summary of developments in the green energy sector over the past decade, see Eurofound’s 2012 ERM annual report, pages 22–26.

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