SunPower cuts jobs: Will Trump’s policies undercut renewables?

The solar company's plans to lay off a quarter of its workforce come as the energy industry braces for a new energy regime under President-elect Trump.

Pablo Sanhueza/Reuters/File
Solar panels producing renewable energy are seen in the photovoltaic park in Ollague, Antofagasta region, northern Chile in 2015.

SanJose-based solar power company SunPower announced plans to lay off a quarter of its employees on Wednesday, just months after letting 15 percent of its workforce go in August.

SunPower executives say that their decision is part of the company’s long-term economic plan to help position itself for the future, citing challenging industry conditions and demand decline in China.

The move comes as the entire energy industry prepares for a possible shift in national focus under the incoming administration of president-elect Donald Trump, who campaigned on restoring jobs in the coal industry – a significant reversal of the Obama administration's push to cut back on fossil fuels and bolster renewables.

Industry experts are conflicted about the implications of federal level policy changes on the industry, although they are confident that solar isn’t going anywhere.

“We are concerned about the future of solar power,” says Susan Boucher of New England Clean Energy in a phone interview with The Christian Science Monitor. “That said, solar is very popular, and it is here to stay.”

While part of the solar industry's current problem is that the energy industry has engaged in a campaign against solar, according to Ms. Boucher, another, somewhat counterintuitive factor is the industry's massive expansion. As such, market prices are being driven down by the amount of competition among solar energy providers.

SunPower, which grew from 35 employees to 8,000 in the past 13 years, says that its announcement on Wednesday is primarily motivated by a desire to combat short-term market conditions.

"We believe these actions, which are fully supported by our board of directors, are important to position the company for sustained profitability through the current industry transition,” said SunPower CEO Tom Werner in a press release. “With solar at grid parity in many markets, we believe the long-term industry opportunity has never been greater."

"This comprehensive restructuring program will enable us to successfully navigate the current challenging industry conditions while positioning us for success over the long term," SunPower chief financial officer Chuck Boynton added.

Yet as Mr. Trump continues to promise deregulation of energy industries, including the coal industry, discusses tax breaks that could hurt clean energy, and nominates individuals such as future Environmental Protection Agency head and anti-regulation crusader Scott Pruitt, is the solar industry concerned?

Not really, according to some solar industry leaders.

"I’m as optimistic as ever about home solar because demand comes directly from consumers," said Lynn Jurich, chief executive officer and co-founder of Sunrun solar company, the largest dedicated residential solar company in the United States by email. "It harnesses Americans' collective desire for more innovation, jobs, and choice, and on top of that, it saves consumers money and cleans up our air. That's why recent polling shows that 85% of the public, including 84% of Republican voters, support rooftop solar."

In 2015, a Gallup poll found that 79 percent of respondents believed that the United States should put more emphasis on solar power resources than it was doing already.

“Solar power is here to stay,” says New England Clean Energy’s Boucher.

In Massachusetts, Boucher says, solar energy exploded in popularity due to incentives offered by the state. In neighboring New Hampshire, which offers fewer incentives for solar business, the industry has not experienced nearly the same level of growth.

In the past two terms of his presidency, President Obama has backed clean energy, both through the Clean Power Plan, and through granting stimulus money to solar companies.

In 2011, The Christian Science Monitor’s Mark Clayton reported on the difference that Department of Energy investment made to the burgeoning industry:

In the past two years the Energy Department has offered over $12 billion in loan guarantees for 16 solar projects – about two thirds of the recipients are power plants, the rest are solar manufacturers – with stimulus funds from the 2009 American Recovery and Reinvestment Act .

Friday the DOE once again hammered home its view that solar’s promise is real, with a $150 million loan guarantee to 1366 Technologies, a Lexington, Mass. -based solar wafer manufacturing company that has a great new technology – but no manufacturing plant. Now it will.

At the current rates of declining cost, the DOE and others project, solar will be competitive with coal in 2020.

At that point, the DOE website says, there will be “rapid, large-scale adoption of solar electricity across the United States.”

Yet federal solar investment doesn't have a perfect track record – critics cite Mr. Obama's disastrous multi-million dollar investment into failed Silicon Valley solar company Solyndra

Policy can be incredibly important in the solar industry, Boucher says. But industry experts don’t seem too worried.

“The truth is that the low cost of Natural Gas has decimated the coal industry, not the regulations,” New England Clean Energy CEO Mark Durrenberger tells the Monitor by email. “Even if Trump were to 'deregulate' coal, the economics of coal are are far worse than natural gas. On top of that, it is almost as hard to get a coal plant built in this nation as it is to get a nuclear plant built. Local objection in these cases is quite powerful.”

“As costs continue to drop, solar becomes even more and more attractive relative to traditional fossil fuel generated electricity. It, of course, has the added benefit that it is non-polluting.”

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