Solar manufacturing is not without economic risks for Oregon

What does Oregon’s growing solar manufacturing sector look like to an economist? An awful lot like the state’s semiconductor manufacturing sector, as it turns out.

As such, it carries the same risks for the Oregon economy when it comes to recessionary slowdowns.

“As with any manufacturing sector, it’s volatile,” said Tom Potiowsky, Oregon’s state economist. “When demand is high, everyone starts supplying.”

And when demand falls off, which can happen suddenly, the manufacturers are hit with a sucker punch.

“They tend to be more sensitive to the business cycle,” Potiowsky said.

The solar manufacturing sector is also subject to the volatility of incentives put in place to encourage solar purchases.

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Renewable energy advocates say that the purpose of incentives are to bolster the industry while costs come down to make solar more comparable to the prices of other energy sources. But the boom and bust of incentives has taken its toll on solar companies in Europe where cuts to incentives have stalled solar installations.

Patrick Emerson, associate professor of economics at Oregon State University and editor of the Oregon Economics blog, sees a different potential risk for an Oregon economy with a generous helping of solar manufacturing jobs.

“Oregon does appear to have a comparative advantage in these more delicate and more cutting-edge manufacturing processes,” Emerson said. “But I am skeptical that this advantage will remain for solar.”

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