PANDEMIC

Inside clean energy's coronavirus job crash

It was Wednesday, March 11, when life began to turn upside down for Lee Householder and his 42 employees at Project:Homes, a nonprofit that does energy efficiency retrofits in Virginia.

The events of that day, like the National Basketball Association suspending its season and President Trump blocking travel from Europe, made the novel coronavirus very real and led workers to a crest of worry. They wanted to know the plan. The next day, March 12, "was a very chaotic day of scrambling," Householder said. "How are we going to react?"

The plan that came was quick and absolute. "No one's coming to work on Monday," he told his staff.

And no one has been back.

Head-spinning scenarios like this have been playing out in the last few weeks for hundreds of businesses that build solar projects and do efficiency upgrades at homes and businesses. This kind of work has always relied on site visits and handshakes.

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With those activities now frowned upon, hundreds of thousands of people — who constitute the bulk of jobs in the field of clean energy — have been idled and furloughed.

Interviews by E&E News with seven such enterprises reveal that their difficulties with COVID-19 are less like those of a power plant or an oil field and more like those of a restaurant: The doors are shut to prevent infection, and staying in business has become a race against time.

The customer-facing part of the clean energy economy — solar installers and energy efficiency workers — comprises hundreds of thousands of people. The potential loss of its jobs has more than a personal and economic impact. An abrupt slowdown could cause arteries of talent and materials to wither, impairing America's ability to fight climate change in the years ahead.

"Energy efficiency requires having a whole infrastructure of contractors who are trained to do the work, supply chains that can get them the needed equipment and materials," said Lowell Ungar, a senior policy adviser with the American Council for an Energy-Efficient Economy (ACEEE).

"Even from where we were a month ago, you would need to drastically ramp up that infrastructure" to seriously address climate change, he added.

"If the infrastructure that we have developed over the last few decades goes away, that's a huge problem."

The hands-on nature of these jobs — affixing solar panels to roofs, rewiring electrical junction boxes, blowing insulation into attics or replacing lightbulbs and windows — means they can't be done without entering a building and coming into close contact with others.

With the invisible threat of COVID-19 hovering, the normally beneficent act of solarizing or weatherizing a building has become a gamble no one wants to take.

"It's all inside work and fundamentally too risky to embark on right now," Householder said of the more than 3,000 energy audits his organization does each year.

These businesses are, like builders and electricians, often small and local, with employees who number in the dozens and without deep financial reserves to see them through a downturn.

Some big players in the field are also suffering. Sungevity, a national solar installer based in California, laid off almost 400 workers two weeks ago, according to a report by Greentech Media. And on Monday, market leader SunRun Inc. said it had cut $30 million from its budget mostly from unspecified "labor-related cost actions."

The smaller companies have pinned their hopes on the Paycheck Protection Program, the $349 billion program signed into law last month as a central part of Congress' $2 trillion coronavirus relief package, to make it through the next few months, and they are eager to get back to operations that until just a few weeks ago were thriving.

"We'll be able to keep it operational for three months," Householder said of how long his organization's financial reserves can hold out. "By July 1, hopefully we'll be back."

The new virtual world

The employees of Project:Homes are among the lucky ones: They are still getting paychecks, thanks to a large reserve the nonprofit has built up over years. None of the for-profit companies interviewed for this story are paying the people they've furloughed.

"As with everyone, it's been extremely difficult," Householder said.

Project:Homes' situation was complicated by Householder's whereabouts. When the crisis hit, he was in France on a family vacation to celebrate his and his wife's 50th birthdays. He suddenly found himself managing a companywide transition to virtual work while he was several time zones away.

When he returned to Richmond, Va., on March 14, Householder needed to shelter even more than most: Because he had come from a coronavirus hot zone, he had to self-quarantine at home for two weeks.

Despite the hurdles, Project:Homes had within a week set up everyone to work remotely. Its normally bustling office and warehouse space became a ghost building, open only for a few hours each week for staff to retrieve papers and equipment.

The company's employees either find themselves at loose ends or on reduced schedules, depending on their roles.

The billing workers are finishing off outstanding invoices and doing what they can to keep money coming in. The auditors are processing applications so that the company can spin up quickly once it can work again, said Kerri Walker, the nonprofit's director of energy conservation programs.

Those whose jobs involve visiting buildings, like inspectors and project managers, are idle. Project:Homes' network of 40 to 45 subcontractors, who do the physical work in customers' homes, have nothing to do. "One hundred percent of our subcontractors are offline," Walker said.

The scale of coronavirus job losses for the clean energy economy is so far unclear.

ACEEE, the efficiency organization, says that 1.32 million Americans are involved in the construction side of efficiency, building efficient homes and installing windows, lightbulbs and insulation. An annual solar jobs census found that last year, installer and project development jobs at homes and businesses accounted for more than 130,000 jobs.

One troubling signal is the direction of the solar demand. Analysts at Morgan Stanley and Wood Mackenzie have estimated in the past week that the volume of projects in U.S. residential solar could plunge by a third this year.

Who is spared in the downturn

This downturn for businesses that transact over kitchen tables is striking compared with other parts of the clean energy economy.

For example, utility-scale solar — the construction of large solar farms to supply big power companies — is facing delays but is so far managing its threats (Energywire, April 2).

"We are extremely busy and are not seeing a slowdown," said David Lincoln, a senior vice president of the renewable energy group at Rosendin Electric, which is one of the largest builders of wind and solar plants.

He added that the company is hiring — though it is doing so from other parts of Rosendin that are suffering while the renewable division thrives.

Meanwhile, Project:Homes is trying to maintain a sense of community with a workforce dispersed. Householder puts out a twice-weekly newsletter, and the company has an internal Facebook group, virtual lunches and a shared Spotify playlist.

Householder himself works from his unfinished basement. To set a buoyant tone for his employees, and to make himself feel better, he curtained a portion of it with tapestries and hung ornamental lights. On his lunch break, he plays one of his three pinball machines.

He is planning for the coronavirus crisis to ease and for customers to reopen their doors. He foresees the second half of the year as a race to complete a pent-up pipeline, "doing 12 months of work in seven."

In the meantime, he wonders about his employees' well-being.

"There are certainly ones who gladly take the opportunity not to work, which is fine. Then there are those who are committed to work, and they don't know what to do," he said.

Fast-moving contagion

Sandbar Solar & Electric, a solar installer on the other side of the country in Santa Cruz, Calif., offers another example of how the crisis unfolded. What seemed like a threat to just one part of the business quickly mushroomed.

On March 17, the San Francisco Bay Area became the first region of the country to issue a shelter-in-place order. Less than a week later, on Monday, March 23, half of Sandbar's construction staff, about a dozen people, had for safety chosen to stay home.

This pushback from front-line employees was common around the country.

Joe Marhamati, the co-founder of Ipsun Solar, an installer in northern Virginia, said about 80% of his firm's installers were no longer comfortable going to strangers' homes.

"They wanted their paycheck, but at the same time, they valued their lives," Marhamati said.

On March 24, Sandbar suspended all residential installations. Work in homes increased the risk of coronavirus exposure for both employees and customers, said Cale Garamendi, 39, the head of commercial solar at Sandbar.

"We're interacting with a lot of people over 50. A lot of people are in that danger zone, and we are close by when we are on the roof working with their equipment," he said.

The decision had an emphatic effect on the bottom line. "That immediately eliminated about 25% of our potential revenues and resulting profits right off the bat," Garamendi said.

Of the remaining commercial projects, Sandbar had to drop some as it navigated a new set of social distancing guidelines.

"We don't want to be in the middle of a thoroughfare in downtown Santa Cruz, doing our work. There's a significant number of members of the community that would be upset that we're moving about, and we feel a responsibility there, as well," he said.

Meanwhile, he added, "we have our own little ethical dilemma."

"We're grappling with the fact that by sending people out, they're still going to the grocery store at night to get food for the family, and they are interacting with the world, and there's no way to know if they're getting it one way or another," he said. "You don't know whether just to shut it all down and have everyone go on unemployment, or not."

What remains for the company, after furloughing the dozen field workers who decided to shelter in place at home, is its office workforce, which is focused on a pipeline of projects that it hopes can resume soon.

The dozen remaining field workers who dare to venture forth are building a solar system on a farm project in the Salinas Valley and might start another project at a public landfill.

"We're working in areas behind fences and gates, where we're not going to be seen except by our own crews and a few tradespeople from other companies," Garamendi said.

No shelter

Renewable energy businesses face still other obstacles.

One is the government. Catamount Solar is based in Vermont, one of the few states whose shelter-in-place guidance bars the installation of new solar arrays.

"We were just getting ready to mobilize for two small commercial projects when the state shut us down," said Kevin McCollister, a partner at Catamount, who has recently moved to a home office that he shares with an exercise bike.

Sometimes it is the commercial customer that is halting work.

This happened to Veteran LED, a company that does energy and efficiency upgrades. Two of its clients in Maryland and Virginia are senior living facilities, which are especially vulnerable to the coronavirus.

"So you can understand we're not allowed in there right now," said Chris Rawlings, Veteran's founder.

Repower Orange, a solar installer in Southern California, got the unwelcome call to cancel projects at a church and a school, said the company's owner, Eddie McLaughlin.

Both clients explained to Repower Orange that they had students who were no longer attending school or church because of the coronavirus, and tight finances compelled them to cancel the work, according to McLaughlin.

And many other businesses are retreating from noncrucial expenses. Rawlings is trying to make the case that now, when offices are empty, is the best possible time to replace the lights and make other upgrades. But the pitch isn't working. "They don't want to make any moves," Rawlings said. "They're solely focused on staying alive."

What worries Rawlings is the effect of today's shutdowns on his business six to nine months from now. "That pipeline of prospects and interested people in our services is dwindling, and dwindling fast," he said.

The unknown future

Both clean energy employers and employees are figuring out how to navigate the new, upside-down era of the coronavirus.

One is Brent Walker. He was hired by Ipsun Solar, the northern Virginia solar installer, just two months ago as the first-ever director of its commercial division.

The COVID-19 chill caused Ipsun to lay off 10% of its workforce and furlough everyone else for a month without pay. "We have a lot of people who are younger, men and women who just bought homes in the D.C. area that have large mortgages," said Marhamati, the co-founder. "And we can't guarantee anything, unfortunately."

This has left Walker, 44, furloughed and in an urgent search for income. His wife might make soaps or candles to sell on Etsy, and Walker is doing small electrical jobs for friends.

"It's rough," he said. "I live with my wife and my 83-year-old mother-in-law. We just bought a house, and we just paid our first monthly installment, and we can't pay the next one because we have no income."

Business leaders cited one upside: No business to manage gives them time to do long-term planning.

Some is related to COVID-19 that might also make future work more efficient. Marhamati, for example, is thinking through ways to reduce the size of his crews from five to two to limit social interaction.

Other enterprises are finding some luck at virtual sales.

One salesman at Catamount Solar in Vermont has closed two new residential jobs, entirely via virtual meetings with people at home hungry for interaction. "He said some people are totally excited to talk to him," McCollister said.

The apprehension looms, however, that there won't be a business to return to.

The company leaders interviewed for this story gave similar answers to how long they can survive a coronavirus downturn: one to three months. A key factor, Marhamati said, is how long a company's lenders and landlords are willing to accommodate late payments.

For now, those that Ipsun owes have been understanding. But if in a month or two "they all say, 'Pay up, or we take you to court,' then things get ugly and you have to make some hard decisions," Marhamati said.

The coronavirus has, along with causing disease and disruption, left urgent questions: When will the infections crest, the shelter-in-place orders lift, the doors unlock? When will life return to normal?

"It's the uncertainty that's the killer," said McCollister. "How can you plan, not knowing how long this is going to go on?"

Twitter: @DavidFerrisEmail: dferris@eenews.net

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