Transcript: Solar Leader Expects >80% Market Growth

Rhone Resch, president of the Solar Energy Industries Association, talks of the vast potential in photovoltaics, and the opportunities for the semiconductor industry.

Aaron Hand, Executive Editor, Electronic Media -- Semiconductor International, 7/18/2007

Listen to the audio interview (Runtime: 8:11)

Hand: Hi, this is Aaron Hand, executive editor of electronic media at Semiconductor International. I’m out at SEMICON West in San Francisco. I’m here with Rhone Resch, president of the Solar Energy Industries Association. Hi, Rhone.

Resch: Hi, Aaron. Thank you for inviting me. It’s good to be here.

Hand: Thank you. Rhone is giving the keynote address on Wednesday afternoon at SEMICON West. It’ll be talking about the solar industry; the photovoltaics industry. Maybe you could give us a bit of an idea about really what your focus will be.

Resch: Absolutely, Aaron. Within the energy space, photovoltaics is growing faster than any other segment of the energy industry. So you read a lot about wind, but at the end of the day, solar and PV in particular is the fastest-growing part of the clean tech or the clean energy space. And a big part of photovoltaic manufacturing is you’re dealing with polysilicon wafers and then turning them into solar cells. Or you’re dealing with thin film — so very thin layers of chemicals that basically reproduce the photovoltaic effect. But in both cases, solar really is a very small industry compared to what it will be in the future.

And my presentation goes in and identifies some of those manufacturing challenges that we have; compares them, if you will, to the semiconductor industry and identifies business opportunities for many of the companies in the semiconductor industry who can then branch out into the solar space. So as the solar industry continues to grow out in the future, I think there’s a great opportunity for many companies who work in semiconductor — either equipment manufacturing or in consulting or in engineering — to branch out into working with the PV industry.

Hand: We’ve certainly been hearing pretty much about that lately. I think most of all from Applied Materials has been very vocal about their involvement in the solar industry. Oerlikon Solar is starting to make some noise, letting people know their involvement. … A lot of companies are involved in this space. Do you think that’s set to grow quite a bit more than it is now?

Resch: Absolutely. I think we’re just beginning to scratch the surface. And I think that when Applied Materials makes the jump into an industry, it shows that it’s a real industry – that it’s now mature, and it’s safe for others to jump in. And where I see the solar industry growing in the next five years and then the next 10 years is a big part of my presentation, and it’s something that I think the industry should look at very, very carefully. Because, when people look at the solar space, they tend to think, “Well, it’s supported by policy. And without government support the industry wouldn’t stand on its own two legs.” And the answer is that’s true. Up to this point, that’s been the case. But with rapidly escalating energy prices, with increased concern on global warming, and with states really trying to make a push towards energy independence and improving energy security, solar has a foundation of support on the policy side that’s going to result in almost unlimited growth in the United States.

And, you know, what we’ve seen in the last 10 years or so is a compound annual growth rate in the solar industry of about 35-40% per year. So a pretty good growth rate; something that certainly the semiconductor industry experienced in the early years. But going forward, when we look at what demand is going to be in the United States, we anticipate that we’re going to have compound annual growth rates for the next five years of over 80%. So this really is going to be the next great high-tech growth industry, and certainly a great business opportunity for many companies to get involved with.

Hand: That seems like a phenomenal growth. I’ve heard some comments recently about how much of it is just hype. It’s just the latest thing that we’re hearing a bunch about now. Can the solar industry really maintain that sort of growth?

Resch: The demand is there, for sure. And when you look at available roof space in this country, it’s literally unlimited. And I think the biggest challenge that we face right now as an industry is the price of solar. It is more expensive — 2-3× more expensive — than regular electricity. But as we scale up manufacturing, as we add new engineering practices, and we bring, let’s say, experts from the semiconductor industry into the solar space, I’m very confident that the price will come down dramatically, similar to what we saw in the semiconductor industry, that the efficiencies of solar cells will continue to improve, and that solar will be the lowest-cost option for electricity within 10 years. And so once that occurs, solar really does have an unlimited opportunity for expanding both in the United States and really throughout the world at that point.

Hand: It certainly seems like there’s plenty of room to improve on those efficiencies. A lot of different technologies out there right now. Are we going to start to see some standardization of the technology? Will they start hitting on one or two that are going to work better?

Resch: Well, I think the polysilicon is by far the dominant source material for photovoltaics, representing about 94% of all PV sold in the world today. You will see a rapid increase in thin-film technologies, led at first by cadmium telluride and First Solar, but then amorphous silicon and microcrystalline silicon will be following and probably taking a much bigger segment of the thin-film market in the future. But the answer is that demand is outstripping supply 2 or 3:1 right now, and so all technologies win. And there doesn’t have to be one specific technology, if you will, that becomes a dominant player because there are many different applications. You have solar rooftops in New England and throughout the Northeast and Midwest with asphalt composite shingles. If you can make a solar cell look like that and build it into the roof, that’s a fantastic market. You look at the Southwest and Florida – they use concrete tiles. Building integrated photovoltaics are a big part of that market right now. And, you know, again, a very different product. Then you have the whole commercial market — both on the rooftops of big box stores like Lowe’s or Home Depot — or you have solar farms. In that case, again, a very different product potentially. But at the end of the day, I think solar has some very unique attributes, which everybody recognizes. And when you step back and say, “Okay, what’s the future of solar?” Well, right now we generate about 1/30th of 1% of all the electricity in the country on solar. And I think everybody would agree that’s not enough. And even if we end up generating 3%, you’re talking about a 100× increase in the amount of solar used in this country. But I think that you’re going to see solar be an even more significant part of our energy mix in the future.

Hand: Well, it all sounds very exciting. I know I’ll be following it. We’ll look forward to your keynote on Wednesday, and anybody who’s at SEMICON West can read about it on Thursday in the Show Daily. And thank you very much for joining me tonight.

Resch: Thank you, Aaron.