Foreword by Commissioner Nicolas Schmit Welcome to SolarPower Europe’s EU Solar Jobs Report 2022. At a time when Europe is facing both long- and short-term challenges in its energy security, notably because of Russia’s war of aggression against Ukraine, energy policy has become one of the top concerns of citizens and businesses. Our commitment, in line with the European Green Deal and the European Climate Law, to reach climate neutrality by 2050 implies a significant transition of energy systems. Renewable energies, including solar power areas key to successfully reaching our goals and to accelerate energy transition to ensure energy security, economic prosperity, and maintain and create quality jobs in the EU. The 2022 Solar Jobs Report is very pertinent in this context. The employment and social implications of the energy transition are increasingly visible: opportunities, like job creation in renewable electricity production should be reaped whereas challenges, such as job losses in coal-related sectors must be tackled in parallel. This is of course on top of the immediate issue of how to tackle soaring energy prices and make sure households and companies are supported this winter and beyond. We must reinforce our training systems so that workers have the necessary skills to successfully master the transitions, notably by transferring to emerging sectors, such as solar power. Europeans want an energy system that meets their needs when it comes to affordable prices, while creating quality jobs, and contributing to protecting the environment. Accordingly, in June 2022, the Council of the European Union adopted a Recommendation on ensuring a fair transition towards climate-neutrality, as part of the second Fit for 55 package. Through this Recommendation, Member States commit to adopt measures addressing the employment and social aspects of climate, energy and environmental policies.
Promoting solar energy is at the forefront of the European Commission’s efforts as it does not only contribute to our climate and energy policy goals, but also has substantial job creation potential – in 2021 alone 460,000 jobs were created in the solar industry. In May 2022, the Commission proposed a new Solar strategy, which aims to more than double solar photovoltaic capacity by 2025 and install 600 GWAC by 2030 (up from 160 GWDC at end 2021). One of its components, the European Solar Rooftop initiative, sets a legal obligation to install solar panels on new buildings, as well as public buildings. By 2030, under a 750 GWDC solar capacity scenario, solar energy employment could even reach 1 million jobs.
Executive summary The EU solar market will break another installation record this year. SolarPower Europe’s latest forecast estimates a range of 34 to 40 GW of newly installed capacity in 2022, translating into up to 42% year-on-year growth. Demand for solar power systems is much higher than actual installations testify, as citizens and businesses are desperately looking for rapid and tailored protection against skyrocketing power and gas prices. Familiar obstacles to building a solar power system remain, with permitting challenges and supply chain issues receiving much-needed political attention. However, an underestimated, and major bottleneck, is tightening in several member states right now: a lack of installers. Even where administrative barriers are resolved and solar panels are readily available, Europeans report delays of up to a year to install solar rooftop systems, and even longer if combined with battery storage or heat pumps. The EU Solar Jobs Report, built and modelled in-house, is published annually to analyse the development of direct and indirect employment in a sector producing and installing a technology that is supposed to be the leading power generation source of the continent in the future.
Introduction and methodology If last year’s EU Solar Jobs Report 2021 looked at solar job creation in a perspective of expanding PV markets to achieve long-term climate targets, one year later the climate and energy landscape has entirely changed. Solar capacity deployment is not solely driven by long-term climate concerns anymore – it is now considered as an effective short-term solution to curb soaring energy prices and decrease dependence from Russian fossil fuels. Our analysis from the Global Market Outlook for Solar Power 2022-2026 shows a quickly growing solar market in the EU, with the bloc adding 27.9 GW in 2021, up 40% from the previous year. As policymakers, businesses and households will increasingly look at solar as a solution to their energy needs, the market is set to further grow to 33.6 GW in 2022 and reach 66 GW in 2026 under a Medium Scenario. With the hardships of COVID-19 restrictions fully left behind, the years to come appear extremely bright for solar. Such positive market dynamics are reflected into job creation at all levels. As solar has turned into the primary force driving the EU energy transition – last year, about 153% more solar capacities were installed than the second largest power generation source – its contribution to creating long-term employment in Europe is also quickly growing. Regarding employment, new solar power generation capacities are exceptionally valuable as solar is the most job-intensive among low carbon and renewable energy technologies (see Figure 1).
The aim of this study is to illustrate the current and future job creation associated with solar power in the European Union, based on historical data and the market scenarios from SolarPower Europe’s Global Market Outlook 2022-2026. Moreover, the analysis provides a long-term outlook for solar job creation in the EU, reflecting different levels of ambition towards 2030.The impacts on job creation of the 2030 REPowerEU target is compared to a higher level of ambition whereby 1 TW of deployed PV capacity is reached by the end of the decade.
EU solar jobs Update 2021 In 2021, the solar sector has employed 466,000 FTEs in the EU. 205,000 of these FTEs, 44% of the total, are direct jobs, while the remaining 56% (261,000 FTEs) are indirect jobs (Figure 2).
Decommissioning & Recycling jobs still remain a minor source of jobs, with a 3% share. The predominance of Deployment jobs over the Operation & Maintenance segment stems from the fact that solar PV has a rather high CAPEX intensity and a low OPEX intensity. While it is very job intensive to put solar on rooftops and fields, once installed, little physical maintenance is needed. Not differently from 2020, Decommissioning & Recycling FTEs cover the smallest portion of the total FTEs as the solar PV waste streams are still low in volume – and so they will remain for quite some time. Solar PV waste streams are expected to become significant only from 2030 onwards, when the first larger wave of installed systems in Europe will reach the end of their lifetime. The FTE figures represent job creation on an annual basis, which depends on a series of both short- and long-term factors. Deployment jobs are connected to how much solar capacity has been installed over a year, and therefore depend on the annual market size. Thanks to the sustained growth of the EU market in recent years, Deployment jobs have risen considerably compared to pre-2019 levels, when the annual market had been consistently below the 10-GW mark for several years. With the EU market rising from 8.1 GW in 2018 to 27.9 GW in 2021, with a 51% CAGR over the last three years, jobs in solar deployment have grown accordingly.
factory level, among them SMA from Germany and Fronius from Austria. Europe’s largest inverter producer SMA recently unveiled plans for a new factory at its headquarters in Niestetal that will bring the company’s production capacity to 40 GW by 2024, up from 21 GW today. When looking into the European Union’s solar module value chain, the largest manufacturer is active upstream, in the polysilicon segment. Wacker Chemie is the EU’s only company to operate polysilicon production facilities, with a capacity of around 60 metric tons in Germany that translates into over 20 GW of cell/module products. Since polysilicon production process is less human capital-intensive than the other steps of the value chain, this translates in a relatively limited number of jobs compared to the production capacity’s size. Silicon ingot & wafer manufacturing, the next step in the solar value chain after polysilicon production, is barely existing in the European Union, which is reflected in the very small number of workers in the sector. Most of Europe’s 1.7 GW wafer capacity is located outside of the EU, more precisely in Norway, where low-cost hydro enables production at competitive cost and low carbon footprint. Only one small integrated module producer in France has few ingot/wafer capacities. However, the EU is home to a promising next-generation wafering start-up, NexWafe, which raised 39 million EUR in October 2021 to expand its activities. A first pilot facility is targeted to come online this year, with plans to reach 500 MW in 2024, expandable to 3 GW.
In 2021, about 113,000 solar jobs were created in Poland, establishing the country as the largest provider of solar jobs across the EU with a 24% share (Figure 5). Poland’s role should not appear surprising any longer, although the country is only the third largest EU market, and is not a large PV manufacturer. First and foremost, the majority of the 3.8 GW installed in Poland in 2021 are residential PV systems, which are small rooftop systems whose installation creates more jobs than larger PV systems in the C&I or utility-scale segment. In addition to that, the gross labour costs in the country are much lower than in any other EU GW-scale market, which are located in Western and Central Europe and have higher labour costs. Moreover, Eastern European countries generate more indirect jobs from deployment activities than the rest of the EU. These factors lead to a significantly higher job creation. This trend is visible as well in Greece, which, despite having the lowest annual capacity among the top 7 FTE providers, is ranked fifth with 34,000 jobs created. Though gross labour costs are higher in the largest PV markets in Europe – Germany, Spain, the Netherlands and France – they all feature in the top 7, with 87,000, 66,000, 36,000 and 33,000 FTEs respectively.
A comparison of the two 2030 scenarios is provided in Figure 17. In the REPowerEU scenario, 1,035,000 FTEs are created across the solar value chain. While the majority of these jobs (74%) will still belong to the Deployment sector, FTEs from all value chain segments increase considerably in absolute terms. Thanks to a rapid expansion of the operating solar fleet, Operation & Maintenance jobs will amount to 125,000 FTEs, making up 12% of total jobs. 91,000 FTEs from Manufacturing and 56,000 FTEs from Decommissioning & Recycling would complete the picture. These would represent respectively 9% and 5% of total solar jobs.
Raising the ambition to 1 TW level translates into 461,000 additional solar jobs. Most of these extra jobs are in the Deployment segment, which takes 1,146,000 FTEs alone, 77% of the total. Deployment jobs in the 1 TW Scenario are 50% higher than in the REPowerEU Scenario. Further, the increase in cumulative installed capacity also means more Operation & Maintenance jobs, which are 34% higher than the REPowerEU scenario and amount to 167,000 FTEs. Our modeling assumes that more solar demand also brings more manufacturing capacities in the EU, increasing solar jobs in the sector by 35% to 123,000 FTEs. By contrast, the Decommissioning & Recycling jobs increase is only marginal – the effects of extra installed capacity on these jobs will only take place in the long term.