Behind a giant solar factory, backhoes are digging away, preparing for a new wing that will quintuple production. Inside, an outspoken German executive named Boris Klebensberger is fretting about the color of the new carpet. Samples are perched on his window sill alongside floor plans.
Expanding a factory? Picking out carpeting?
Did anyone tell him there’s a recession?
Buoyed by the potential promise of a green economy, Klebensberger, who heads the US branch of SolarWorld AG, a company based in Bonn, Germany, is ramping up production of solar cells in a retrofitted factory that had its grand opening last October — in the teeth of the financial crisis.
“Was I worried about our position? No!” says Klebensberger, dismissing any hint that he was nervous at the opening.
And he remains just as bullish today. SolarWorld’s plant in Hillsboro, Oregon, which makes enough cells to fit 1,700 solar panels a day, is the biggest of its kind in the US.
For the residents of Hillsboro, and for the Oregon economy, SolarWorld’s presence is a welcome boon. Its employees enjoy being in start-up mode, while others like the cachet of working for a renewable-energy company.
“Green is the way to go,” says Michelle Zillig, who worked at Intel for 18 years before joining SolarWorld as a technician. “People can only have so many computers.”
At first glance, the timing of SolarWorld’s decision to invest US$500 million in the new site during a recession, in a state with an unemployment rate second only to Michigan’s, couldn’t have been worse. Prices for the company’s solar panels have slid about 15 percent since the factory opened, a result of growing competition and slowing demand, especially in Europe. Two manufacturers, GE Energy’s solar branch and BP Solar, have cut production in East Coast plants.
INCENTIVES
But new federal incentives to encourage renewable energy in the US will give the industry a boost, analysts say.
The recent stimulus package included grants for businesses and utilities that install solar energy systems, and the bank bailout package last year removed the dollar cap on a 30 percent tax credit for home installations. Makers of renewable energy equipment also received help in the stimulus package.
“I think the writing on the wall is the US is going to be the big market,” says Jesse Pichel, a solar analyst at Piper Jaffray.
The message for solar companies, Pichel says, is: “Get your butt over to the US if you want to participate and get some of that stimulus package money.”
The US lost its status as the world’s leading solar manufacturer in the 1990s as interest surged elsewhere. Now it makes little more than 5 percent of solar panels worldwide.
ROOM TO GROW
Even with federal support and positive buzz, only a fraction of 1 percent of the electricity in the US comes from solar panels, leaving ample room for the market to grow.
Germany, SolarWorld’s home, is at the same latitude as southern Alaska, often has cloudy skies and is a much smaller country than the US. Yet the number of installed solar panels in Germany is more than three times the amount in the US. Spain and Japan are also ahead.
“Germany is not a natural for solar, but they’ve had vision, and policy followed the vision, and industry growth followed the policy,” says Raju Yenamandra, the vice president for sales at SolarWorld in California.
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