Earlier in the day, The California Public Utilities Commission passed the
California Solar Initiative (CSI), an historic plan that allots USD $3.2
billion for solar energy rebates in the state for the next 11 years,
providing for the installation of approximately 3000 MW of solar energy.
"Of all the numbers in this plan, it's the 11 number that's most
important," said Mark Farber, co-founder and Vice President, Strategic
Planning of Evergreen Solar, a photovoltaic manufacturer. "The most
important significance to this plan is that it takes long term commitments
to grow the industry. Manufacturers are contemplating major investments
because of this. As well as for many installers and distributors, they
need the long term commitment too."
Evergreen Solar will "absolutely" increase capacity as result of this,
said Farber. Already, the company has been in the process of expanding its
manufacturing facilities threefold in Germany, thanks partly to the
country's supportive policies for solar. Now California, where roughly 80
percent of the U.S. solar market has been centered, has its own long-term
rebate plan.
"It has been a bit embarrassing for us as Americans to not play as strong
a role as Germany," Farber said. "This is clearly changing this."
Gordon Handelsman, Sr. Director of Marketing and Sales for Shell Solar,
also a solar PV manufacturer, echoed Farber's thoughts.
"I see the market as a tripod between Japan, Germany and now the U.S.,"
Handelsman said. "The U.S. has been the lagging piece of the stool, this
will address that."
Mark Roper, Vice President of sales and marketing for the U.S. division of
solar manufacturer Schott Solar, added that propping up that U.S. leg of
the global solar market also helps reduce the global risk for the industry
and its current and future investors by diversifying the demand portfolio.
This is similar to the basic mantra of diversifying investments: the more
markets open up, he says, especially ones with long-term policies, the
more that mainstream financial institutions will feel comfortable getting
involved.
And, Roper also now expects Schott to strongly consider opening a new
manufacturing facility somewhere in the NAFTA zone to meet the expected
demand for solar in California.
"Yes we'll increase capacity. This plan is the kind of thing that can
really grow markets," Roper said. "The next move for expansion is to
locate manufacturing in the strong markets."
A key point playing into the industry's growth, and how the CSI might
affect it, is the current bottleneck in the supply chain for silicon,
needed for roughly 90 percent of solar panels built around the world.
Robust global demand has led to a shortage of this critical raw material,
and that situation is predicted to continue to hamper the market, at least
within the next year or more.
"In the short term we probably are not going to see enormous growth,"
Roper said in reference to what the CSI plan could do to boost the market.
"But this gives us, as an industry, confidence to work with silicon
producers to expand capacity. This enables us to secure the feedstock."
Long-term investments in solar silicon feedstock are critical to long-term
investments in overall manufacturing, said Chris O'Brien, Vice President
of Strategy and Government Relations for Sharp Solar, currently the
largest solar PV producer globally.
Just as it takes some lead time to ramp up solar manufacturing facilities,
it takes lead time for silicon suppliers to ramp up their production. One
of the first items O'Brien sees from the California's new long-term policy
on solar is a new atmosphere of security where companies can make
long-term deals for the feedstock supply.
However the industry embraces this plan, there was a resounding
satisfaction that the public utilities commissioners, led by its President
Michael Peevey, took a bold and progressive step this week with a policy
that sends a strong message about the future of solar.
"We can begin to grow again in California," said Kari Smith, Regulatory
Affairs for PowerLight, a solar systems project integrator. "The PUC
effort, led by Commissioner Peevey, showed real leadership. In the end,
it's individuals who show real leadership and that's what makes things
happen."
