Economic Benefits of Solar in Colorado
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When reflecting on Colorado’s economy, some may think back to its early history, when many miners first began settling in the state. For a long time, mining was Colorado’s lifeblood – driving the state’s economy as pioneers struck the Earth seeking out coal, gold, and other minerals.
Considering the many positive economic impacts mining had on Colorado in the past, it might surprise many to learn what industry surpasses it today. Rather than looking downward, many are looking upward toward the sun.
The solar energy industry now provides more jobs to Colorado residents than the once mighty mining industry, reflecting the realities of our new energy economy. According to data from the 2012 U.S. Solar Jobs Census, over 3,600 Colorado residents work in the state’s solar energy industry, placing it sixth in the nation for the number of solar jobs it offers.
A growing field even during a historic fiscal downturn, the solar energy industry is set to become a major economic powerhouse in Colorado. Most importantly - unlike coal, natural gas, or oil - solar energy is an infinite resource, meaning more permanent jobs that remain in the state for decades to come.
Does the solar energy industry impact others?
The solar energy industry doesn’t only benefit researchers, manufacturers, and installers, but a wide range of professionals outside of the industry as well.
Supporting solar panels has direct, indirect, and induced economic effects in Colorado. Direct effects refer to the immediate effects that purchasing solar panels has on the local economy. For example, if you decided to contact a solar installer and place panels on your home, your money would help to employ local builders who would carry out the work.
After installing panels at homes or businesses, solar companies typically reinvest installation profits into their businesses. This indirect economic effect means a business is able to grow and expand, allowing it to buy more equipment or hire more employees.
As more workers are hired or promoted, they spend additional money that is injected into the local economy as an induced effect. Induced effects typically refer to money spent by individuals on food, clothing, housing, transportation, recreation, or other goods and services outside of the solar energy industry.
In Colorado, for example, this might mean more money spent at ski resorts, helping to sustain an entirely separate industry. It all acts as one circular, supportive system that stays local since many green jobs can’t be exported – installers naturally must remain near the locations where systems are purchased and used.
Current economic benefits of solar energy in Colorado
By 2012, more than 43,000 Colorado households had installed solar panels on their roofs, generating 270 megawatts of power. While that initially seems impressive due to the sheer number of homes, also think about how much money is injected into the state economy simply because residents chose renewable energy.
Placing solar panels on a home is the end result of a long process that first begins with research and development. Solar research in itself is a major economic benefit to Colorado, which is home to the National Renewable Energy Laboratory (NREL).
What does the solar energy industry offer Colorado?
Currently, 266 companies make up the solar panel industry in Colorado. These include:
- 12 Manufacturing facilities
- 119 Contractor/installers
- 17 Project developers
- 22 Distributors
- 96 Other -- financers, engineers, or legal supporters
Source: Solar Energy Industries Association
Researchers at NREL test solar effectiveness and improve cell reliability, partnering with a number of solar manufacturers and developers along the way. All told, NREL contributes $714 million annually to Colorado’s economy, according to estimates from the organization.
With accelerated research and development, solar manufacturers are able to create cheaper and more efficient solar panels. Colorado contains 32 solar manufacturing companies, employing many engineers, technicians, and salespeople. These manufacturers ship cells and panels across the world – as of 2012, Colorado has exported over $94 million in solar technologies.
Once they’re manufactured, solar panels are distributed to installers who make up the bulk of solar energy’s economic benefit to Colorado. There are approximately 119 solar panel installers in Colorado, investing $187 million into the state’s economy.
All told, there are over 266 companies in Colorado related to the solar energy industry – with more developing each year. These growing businesses offer hope for a state still recovering from the economic recession, employing thousands of workers and injecting much needed cash into local economies.
What future benefits could the solar industry have for Colorado?
If friendly solar policies and rising demand were to continue along their trend, what could this mean for Colorado’s future? Renewable energy advocates Environment Colorado and Vote Solar Colorado set out to discover the possibilities in their study, “Investing in the Sun,” released in 2012.
Researchers note that despite only encompassing 0.8% of total electricity generation in Colorado, solar energy has widespread economic impacts on the state. As of 2012, Colorado had installed 270 MW of solar energy – but what if that amount rose to 1,000 MW by 2020?
Installing 1,000 MW would require a lot of workers in construction of panels, sales, and engineering. Researchers estimate that embarking on a 1,000 MW goal would lead to the creation of more than 33,325 jobs over the course of 10 years.
These 33,325 workers could add an further $1.72 billion in income taxes to the state, and spend as much as $4.27 billion on goods, services, and activities outside of the solar industry.
More solar energy would also have effects outside of the job market, allowing others throughout the state to save on energy costs further down the line.
Colorado residents must be aware of the finite nature of many of the resources they currently take advantage of, such as natural gas. While some politicians and interest groups place their bets on gas, it’s important to remember that those resources are limited.
Currently, natural gas prices may be low, but the commodity’s prices historically rise and fall without warning. By installing 1,000 MW of solar power in Colorado, residents could save over $100 million in energy prices each year – providing a buffer against volatile gas, oil, and coal prices.
Helping to drive the local economy
Solar energy has shown its potential to Colorado over the last five years, and is set to continue its successes.
If you want to contribute to the growing solar economy in Colorado, consider contacting solar panel installers in your area. Not only will your personal interest in solar impact a local company, but also could have statewide ramifications years later.