April 15, 2011

GE, Feds Bet Big On Solar Industry

By: by Robin K. Cooper, The Business Review


Some of the world's leading solar manufacturers are negotiating with the University at Albany's College of Nanoscale Science and Engineering about joining its new $500 million solar research center.

A week after the federal government awarded $58 million to help CNSE create the new U.S. Photovoltaic Manufacturing Consortium, the number of private companies and organizations planning to join is approaching 100.
Solar is the largest and fastest-growing technology industry with a 30 percent compound annual growth rate, according to Pradeep Haldar, vice president of clean energy programs at CNSE.

"That's causing a lot of people to pay attention," Haldar said. "Over the past week, the phone hasn't stopped ringing here. There's a non-stop buzz."
The solar industry, which for years has relied heavily on government subsidies to remain cost-competitive with other energy sources, is on the brink of a major breakthrough.

"We are approaching a point of getting to a cost position where this industry is going to explode," said Daniel Armbrust, CEO of Sematech, the Albany-based computer-chip manfacturing consortium that teamed up with CNSE to manage the new solar research manufacturing center, known as PVMC.

Sematech and CNSE will use their existing technology and business model to jump-start the region's solar industry after spending the past 12 years building up the area's semiconductor sector.

The solar research center is beginning at a time when General Electric is eyeing this region as a potential site for a new $600 million solar manufacturing plant.
The 400-megawatt plant would employ 400 and produce enough panels to power 80,000 homes a year. The Albany-Schenectady market is one of 10 locations under consideration. Others include Colorado and South Carolina.

Proximity to research teams, cost of plant construction and government incentives are among the driving factors that will decide where the plant is located, said Victor Abate, vice president of GE's renewable energy business headquartered in Schenectady.

A decision is expected in the next several months.

"We are addressing the biggest barrier for the mainstream adoption of solar technology-cost," Abate said.

That same strategy is the force behind the creation of the solar manufacturing research center at CNSE.

"This area has the potential to be the hub of multiple industries," Armbrust said.

The U.S. Department of Energy awarded $57.5 million to help underwrite PVMC because it will use Sematech and CNSE's collaborative research model that attracted more than 250 companies and created more than 2,500 semiconductor jobs in this area in 12 years.

PVMC expects to partner with hundreds of companies and organizations to reduce the cost of solar energy, to make it competitive with fossil fuels and other sources without the use of government subsidies.

The consortium's push to use solar innovation to eliminate the need for subisidies also will have a major impact on the smaller businesses already operating in the industry.

Mark Fobare, president of Monolith Solar Associates LLC in East Greenbush, said his solar-panel installation business is directly impacted by state and federal incentives.
"I quite literally can't look past the next piece of legislation," Fobare said of his three-year-old business.

Monolith installs commercial solar systems for businesses and nonprofit organizations such as churches in New York and New Jersey.

Revenue for the nine-employee business is expected to grow to $10 million this year because state and federal incentives make it possible for Monolith to install solar panels and offer customers a 20 percent reduction in utility costs.

But the business model is only as solid as the state and federal incentives, said Steven Erby, Fobare's business partner.

The ultimate object is to reach what Fobare calls "grid parity." "That's the holy grail," Fobare said.

If manufacturers and researchers are able to develop new technology that can reduce or eliminate the need for government subsidies to make solar panels cost-competitive, Fobare said businesses like his have an enormous future.

It has taken roughly 20 years for the solar industry to drive down production costs from $25 per watt to between $4 and $5 a watt, said Haldar of CNSE.

The new solar manufacturing research will help the industry drive down the cost to about $1 per watt in the next five-plus years, he said.

The motivation behind CNSE and Sematech's partnership is very similar to the push to create a semiconductor research consortium in the 1980s, said Armbrust of CNSE.
Thirty years ago Japan took a lead in computer-chip manufacturing, prompting university, government and private U.S. companies to pool research efforts and money to catch up, he said.

Now, China, Germany and Spain have an edge over the United States in solar manufacturing.

"It is really hard to get these things going," Armbrust said. "You need a damn good crisis."

China's foothold in solar manufacturing has created a crisis, Armbrust said.
New York state responded by allocating $125 million to PVMC along with $275 million in private investments and $57.5 million in federal money.

It won't take long for research to get started, Armbrust said. "This is going to take months, not years, to get going," he added.