The heady cocktail of generous federal and local government incentives and renewable energy mandates in the United States could create a new manufacturing hub in a country that often talks about losing manufacturing jobs to Asia.
In fact, cell and solar panel manufacturing capacity is likely to grow roughly 50 percent annually between 2008 and 2012, said Shyam Mehta, senior analyst at GTM Research, Tuesday at Intersolar North America in San Francisco.
The U.S. market demand for solar panels could grow from 342 megawatts in 2008 to 2.13 gigawatts in 2012, he added. That appetite is driving companies such as SolarWorld and Schott Solar, both in Germany, and Japan's Sanyo to set up factories in the United States.
China-based Suntech Power said recently that it would set up a 100-megawatt panel assembly plant, though it hasn't said where (see Suntech Power Plans to Start U.S. Panel Production in Early 2010).
"The industry's view is that the U.S. will be a leading market for supply and demand," Mehta said. "The U.S. is poised to grab a larger share of manufacturing [globally] starting in 2010."
The country produced 499 megawatts of solar panels in 2008, 70 percent of which were thin-film panels. Ninety percent of those thin films came from factories owned by First Solar and United Solar Ovonic.
Mehta, who provided some key figures from his upcoming report on photovoltaic manufacturing in the United States, predicted that the country will likely be able to produce more than 2.7 gigawatts of cells, as well as panels, by 2012.
Thin-film manufacturing would play a big role in the growth. By 2012, 66 percent of the factory capacity would be devoted to making thin-film panels, including those that use cadmium-telluride, amorphous silicon and copper-indium-gallium-selenide (CIGS).
CIGS companies are likely to expand their production capacity from 32 megawatts in 2007 to about 1.3 gigawatts in 2012, Mehta said. His bullish outlook, which he expressed previously, has raised eyebrows because most of the CIGS companies in the United States are in early stages of commercial production.
HelioVolt, of Austin, Texas, opened its first commercial factory last October, but doesn't expect to reach mass production until 2010 (see HelioVolts Delays Mass Production Until 2010). Ascent Solar, in Littleton, Colo., is building its first commercial factory of 30 megawatts (see Ascent Solar Makes CIGS on Plastic). Miasole, based in Santa Clara, Calif., hasn't given an update of its progress since last year. Nanosolar said it started commercial production in late 2007, and has since built new manufacturing capacity (see Nanosolar Broke Ground on 1MW Power Plant, Launched German Panel Factory).
Fremont, Calif.-based Solyndra has wowed the world with its announced, $2 billion worth of contracts, but it has been mum about its production capacity and volumes (see Solyndra Adds $238M Contract, Brings Backlog Total to $2B). It is receiving a $535 million federal loan guarantee to build a 500-megawatt factory in California.
Mehta argued that it would only take a few successful CIGS companies out of the current crop of eight to 10 businesses to make a significant contribution to the solar market in 2012. He conceded that tough challenges remain for these companies to be able to mass-produce products at competitive costs.
He expects a big boost for producing crystalline silicon solar panels. The factory capacity devoted to making this type of solar panels could expand from 389 megawatts in 2008 to about 1.23 gigawatts in 2012.
These numbers are based on factory announcements made by various companies, so they could go up significantly to reflect plans that haven't been announced. Mehta also accounted for factors such as the time it takes to bring a new factory from initial to full production in his calculations.