As solar power manufacture sets here, it rises in East

March 31, 2010|By Jay Hancock

It's tempting to see BP Solar's Maryland factory as a casualty of the global-warming wars.

The December Copenhagen summit on greenhouse gases was a dud. Congress shows few signs of regulating or taxing carbon dioxide emissions. Now BP Solar is closing its Frederick solar-panel plant three years after announcing a big expansion.

But the factory's fate might say more about the recession and U.S. manufacturing competitiveness than about the future of solar energy. Solar-panel manufacturing is thriving, just not in places like Frederick.

"It's clearly a trend that's continuing to work its way through the solar industry," says Ross Young, chief photovoltaic analyst at IMS Research in Austin, Texas. "More and more, companies are shutting down operations in the U.S. and Europe and setting up new operations in China and the rest of Asia."

Obviously, it's not just the solar business. The making of steel, textiles and electronics also has shifted eastward. What's shocking about the solar swan song is how quickly it happened and how even government programs promoting solar energy seemed to do little to prevent it.

They might not cheer the trend, but Americans are used to seeing mature industries move jobs offshore.

New technology is supposed to be different. The latest gadgets are presumed to require the conceptual, engineering and manufacturing expertise that only developed countries can supply. Typically, new technology also delivers gross margins high enough to pay Western wages all along the production chain, at least for a while.

Maryland did many of the right things to promote solar energy and BP Solar, whose buildings and photovoltaic array along Interstate 70 have become a symbol for the state's alternative-energy expertise.

The state just signed a huge deal to buy alternative energy for government agencies. Money from a regional tax on carbon dioxide finances grants of up to $5,000 or more per Maryland household for solar installations.

But the energy crash that took gas from $4 a gallon to $2.50 hit the solar business, too. It's not just that energy use has declined along with the economy. Tight budgets mean government subsidies for alternative energy also have plunged. The solar industry finds itself, temporarily at least, with way too much capacity.

Crystalline solar cells cost half what they did a couple of years ago. The constituent silicon costs a fifth of what it did. Profits have disappeared, so companies are cutting wages by shifting to East Asia. Even there it's not easy. Thanks to lavish government incentives, there are 40 companies making silicon for solar cells in China alone, Young says.

So even Germany and Spain, with perhaps the world's most aggressive policies to promote solar energy, are losing solar-panel plants to Asia. A BP Solar closed its Spain factory last year.

"It's a surprise we've been able to hang onto them as long as we have," says Malcolm Woolf, director of the Maryland Energy Administration.

For all of solar energy's high-tech cred, the manufacture of silicon cells and panels is quite labor-intensive and old-fashioned. That seems to have accelerated the shift of production to the developing world, even as U.S. plants still make plenty of high-tech stuff such as microprocessors and biotech drugs.

It's little consolation to the 320 people who are losing their jobs, but there are two silver linings to the Frederick plant's closure.

First and obviously, cheaper solar equipment manufactured overseas makes it easier for homes and businesses to exchange dirty coal energy - the chief fuel for Maryland electricity - for clean kilowatts. Combine Maryland's grants with federal credits and other incentives, and you can start replacing BGE electricity with homemade solar for about $15,000, says Woolf. That seems expensive, but you're basically buying 30 years' worth of energy all in one chunk.

The second and corollary bright spot is that there is a thriving economy of selling and installing solar power in Maryland and across the country.

Maryland is handing out between 50 and 100 solar-installation grants per month. SunEdison, one of the biggest solar-energy services companies in the world, is based in Beltsville.

Constellation Energy's planned 17-megawatt solar farm in Emmitsburg would break today's top-10 biggest list for U.S. arrays. But it'll surely be edged out by other projects by the time it's operational. Google, Walmart, Federal Express and many other companies are going solar. Mr. Sun helps power General Motors' transmission plant in White Marsh.

Maryland's solar-friendly policies, enacted with BP Solar's lobbying, will benefit the state in the plant's absence. Probably, not even a nationwide, cap-and-trade system for discouraging carbon emissions would have saved it.

The solar economy, however, is here to stay no matter what happens in Frederick or Washington.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.