Stimulus = US and Arizona growth in solar energy and green jobs

Implications

The impact of President Obama’s American Recovery and Reinvestment Act is now paying dividends in Arizona and other states across the country. In retrospect, the solar industry has primarily been a subsidy based business historically; however increased consumer demand coupled with technical innovation has reduced costs dramatically in recent years.

Analysis

As solar energy nears equal cost competitiveness, also known as power grid parity, in select regions of the world and the industry’s cell manufacturers proceed in lowering costs further, this industry is becoming a serious on-grid alternative. The solar industry growth in the last several years is reflected in a materials market for module manufacturers, which is expected to escalate in coming years, according to a recent report from Linx Consulting (Mendon, Mass.). The report indicates growth for crystalline silicon and various thin-film solar materials from a $2.3 billion market to a $15 billion market by 2015. Although thin film comprises approximately 10% of the overall market currently, Linx predicts that thin film would increase to 40% of the solar market in 2015 on a watt basis. The study shows a particularly high growth rate for float glass, which is a critical base material which thin film based solar cells are developed on. These developments are a positive indicator for capitalization of the enormous solar potential for the state of Arizona. A Mesa, AZ based company, SolFocus, announced the completion of its expanded solar glass reflector product. With a 175 percent increase in manufacturing floor space and a new line of manufacturing equipment, the SolFocus Glassworks facility will have the ability to produce 2 million concentrating solar reflectors  annually. The mirrors represent close to 30 megawatts (MW) of the company's concentrating photovoltaics (CPV) solar system, which is more than 15 times the plant's capacity a year before. The expanded factory will open this spring, with full production expected in the second half of 2009. The proprietary, convex-shaped mirrors produced at the facility serve as a critical component within the SolFocus CPV system design. As part of a full CPV system, the mirrors reflect the sun’s rays 500 times onto a solar cell, enabling the system to generated solar power with highly competitive panel conversion efficiency levels of about 25 percent. These types of innovations are beneficial at the consumer level for driving down solar panel installation costs and/or residential energy bills. American Solar Electric and SunRun have agreed to a partnership that will offer homeowners a more affordable alternative to purchasing an American Solar Electric system exclusively. With SunRun's solar lease, Arizona customers may now purchase an American Solar Electric system for as low as US $1,000 upfront vs. the typically $25,000 initial fixed costs and receive significant cost savings on their monthly electricity bills immediately. SunRun also provides complete monitoring, maintenance, repairs, insurance and performance guarantees for all its customers; thus, simplifying the process of “going green or solar” for homeowners. SunRun was launched in California in 2007 and has seen exponential growth over the past two years. The impact of President Obama’s American Recovery and Reinvestment Act is now paying dividends in Arizona and other states across the country. The Center for Interface Science: Hybrid Solar-Electric Materials, or CIS:HSEM, was announced by the White House in conjunction with a speech delivered by President Barack Obama on April 27 at the annual meeting of the National Academy of Sciences. The University of Arizona in Tucson will become the home of a $15 million Energy Frontier Research Center, or EFRC, one of 46 new centers of its kind announced this week. CIS:HSEM is specifically one of 16 EFRC's to be funded by the American Recovery and Reinvestment Act. The 46 EFRCs will each receive funding between $2 and $5 million per year for a planned initial five-year period. However, the EFRCs chosen for funding under the Recovery Act will mainly provide low-paying employment for workers such as: postdoctoral associates, graduate students, undergraduates and technical staff, amidst its goal to preserve and create jobs, and promote economic recovery. The solar industry has primarily been a subsidy based business historically; however increased consumer demand coupled with technical innovation has reduced costs dramatically in recent years. It is becoming an increasingly attractive option for utility companies, commercial businesses and residences; however several estimates have shown tepidity in the market and less than stellar forecasts in the next three years. Moreover, green collar jobs will be primarily generated by companies themselves based on market dynamics, independent of government funding.

Analyses are solely the work of the authors and have not been edited or endorsed by GLG.

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