SAN DIEGO — The United States is poised to become the world’s largest user of solar power in the next decade, experts say, thanks in part to Silicon Valley innovation and the country’s vast land area and amount of sunshine.
And that title will bring an unexpected benefit: Manufacturing jobs arriving in the United States rather than being shipped overseas. Solar companies have determined that it makes economic sense to manufacture close to your market, because among other factors it reduces shipping costs.
“Global companies are looking for the next hot market,” said Julia Hamm, executive director of the Solar Electric Power Association. “It’s going to be the United States.”
At the Solar Power International conference here last week, about 20 percent of the 22,500 participants represented international companies, said Hamm, whose group along with the Solar Energy Industries Association staged the week-long expo.
Germany and Japan can boast of more solar installations today, but the U.S. is catching up for a number of reasons, ranging from the nation’s land to the amount of sun and Valley solar companies. Add to that the recent passage of an eight-year extension of a solar tax credit and a lifting of the tax cap on residential projects, and most experts expect the U.S. to become the No. 1 solar nation in the next decade.
“We believe strongly that you can manufacture these technologies in the U.S.,” said Anna Schneider,spokeswoman for Solar World, based in Bonn, Germany. “We believe in the market.”
Last week, for example, her company opened a factory in Hillsboro, Ore., which has the capacity to make 500 megawatts worth of solar cells by 2011. Solar World is calling the new facility the largest photo voltaic plant in the U.S., and says it will employ 1,000 people. Schneider said the plant will make 100 megawatts worth of PV solar cells before the end of the year, which will grow to 250 megawatts next year and reach capacity of 500 megawatts by 2011. (Although solar power is intermittent, the accepted industry norm is that one megawatt of power generates enough electricity for 750 California homes.)
With the world’s solar industry expected to grow from $20 billion last year to $74 billion by 2017, more factories are likely to follow.
“The U.S. is potentially the largest future market,” said Steven Chan, the chief strategy officer and president of global sales and marketing for China-based Suntech. Chan moved to San Francisco this year to implement that company’s North American strategy. Right now, he said, U.S. sales represent less than 10 percent of Suntech’s revenues.
But in just a few months, he has expanded the U.S. workforce from five to 50 with plans to expand the number of Suntech dealers froms 25 to 150 or 200. The company also made two recent deals to become more competitive. It bought EI Solutions of San Rafael to be able to create utility-scale projects such as the one SunPower announced with PG&E. And it formed a joint-venture called Gemini Development with MMA Renewable Ventures of San Francisco to be able to finance large projects.
In the near future, perhaps two to four years, Chan said, the company will consider opening manufacturing sites in the United States, or Mexico, or Europe.
SunPower, the large, publicly traded solar-panel maker based in San Jose, manufacturers its solar panels in the Philippines, where it made about 100 megawatts worth in 2007. But several Silicon Valley start-ups, including Solyndra in Fremont and Nanosolar in San Jose, already are manufacturing solar cells locally.
“We built here because Silicon Valley is just a unique place in terms of concentration of talent, investment, innovation and just a different drive for the way things are done,” said Chris Gronet, Solyndra’s chief executive officer. The company’s second factory also will be built in Fremont, since a Department of Energy loan guarantee mandates a U.S. location.
San Jose Mayor Chuck Reed sent some city staffers to the Solar Power International conference as the city pursues a half-dozen clean-tech companies. Combined, Reed said, the companies are seeking nearly 2 million square feet of space. “They have interesting requirements,” Reed said. “They would like to do manufacturing here. That means big buildings with tall ceilings.” And jobs, he said.
At the Solar Power International conference, many of the world’s leading solar companies talked about expanding to meet the expected increase in demand for solar panels in the United States.
Sharp, which still makes most of its solar cells in Japan, began manufacturing some in Memphis, Tenn., in 2003. It recently expanded the plant’s annual output from 60 to 100 megawatts of panels.
“There’s tremendous growth potential for solar in the United States,” said Ron Kenedi, vice president of the Sharp Solar Energy Solutions Group.
Other solar makers, including Germany’s Schott Solar (in New Mexico) and Q-Cells (in Mexicali, Mexico) as well as First Solar (in Perrysburg, Ohio) have announced North American expansions.
Solar World also makes solar cells in Camarillo in Southern California, but decided it needed a larger U.S. presence, Schneider said. Hillsboro is also where SpectraWatt, Intel’s solar spin-off, will build its factory, slated to open in 2009.