Building an AZ solar supply chain and industrial cluster
Building an AZ solar supplychain and industrial cluster Glenn Hoetker Anthony Evans
Our missionMore investment in solar energyproduction and supply chaincapacity is attracted to Arizonaas a result of tighter linkageswithin the cluster. Theselinkages extend among the valuechains, the talent developmentsystems, the research base,investors, and public policies.
Our approach• Identify the characteristics of a successful industrial cluster• Identify factors inherent in robust supply chain development• Identify core clusters and their supply chains• Identify critical gaps• Recommend steps to close gaps and key players to engage• Identify new directions to further build cluster capability• Set milestones and fill gaps in collaboration
MembershipBud Annan, Arizona State UniversityFred Buss, Town of Gila BendBennett Curry, Arizona CommerceAuthorityAnthony Evans, Arizona StateUniversityGlenn Hoetker, Arizona State UniversityMichael Neary, AriSEIARon Vokoun, Mortenson Construction
AZ solar industry - snapshot• 300-400 AZ firms easily meet current in-state demand• Range of solar technologies – Photovoltaic (PV) – Concentrated Solar Power (CSP) – Solar Heating & Cooling (SHC)• Technology-specific supply chains
Photovoltaic supply chain (pre-construction/installation) RAW WAFER SOLAR SOLAR SOLAR INGOTMATERIAL MFG CELLS MODULE PANEL• U.S. largest polysilicon producer in 2008 (43%) but China, Taiwan and South Korea are now the key players• Limited U.S. wafer manufacturing facilities – Hemlock and MEMC• North America = 7.4% of global cell production capacity (2010)• North America = 8.7% of global module production (2009)
CSP supply chain(pre-construction/installation)• Greater opportunities for localized manufacturing• Components cut across technologies – Mirrors, reflectors, collector structures, heat transfer fluids, salts, turbines, steel etc.• 18 CSP U.S. mfg facilities in 2009• Solana’s U.S. supply chain = 29 companies in 22 states ($730 million) – 23% invested in AZ
AZ solar-related employment• Solar Foundation (2011) 4,786 solar jobs at 900 AZ establishments – 3rd largest state for solar jobs• BLS suggest 49,717 jobs across all green goods and services (GGS) – 23rd largest state for GGS jobs• SEIA survey still in progress• Seidman survey: 5,500-7,400 solar jobs• 0.2-0.3% of AZ’s non-seasonally adjusted non-farm employment
AZ solar-related employment Employment Opportunities by Sector 383 814 8% 17% Manufacturing1292 Installation27% R&D Sales 1723 Other 574 36% 12% Source: Solar Foundation (2011)
AZ competitive advantages• Solar insolation• Proximity to California• Land/resource availability• Streamlined zoning and permitting• Solar construction know-how• On the job learning and innovation• University research community• Workforce supply
Cluster potential• Viable solar cluster drives economic growth: – Project employment and input impacts – Attracts new downstream local suppliers – Encourages certification – Firms can export know-how out-of-state• Limited potential for solar PV manufacturing• Greater supply chain opportunities for other solar technologies• Construction sector could be a real winner
Supply chain cluster example• Construction = biggest benefactor• Supply of steel, concrete, mirrors, nuts, bolts and electrical supplies• Short-term employment impacts: – Utility-scale plants = 1000+ jobs – Commercial DG = 50-100 jobs – Residential DG = 1-2 jobs• Key: convert the jobs into job years
Challenges and barriers• Utilities have almost met RPS targets• Energy demand increases >1% each year• Positive construction impacts will dry up• Residential taxes and incentives are on a per household basis, not per system installed• New AZ homes still built without solar ready ordinances• Availability of capital investment• Lack of optimism within the local industry• Potential migration to states with opportunities
Cluster solution 2: R&D• AZ solar R&D center• Close co-operation between education, utilities, public and private sector• CA ahead for solar training and courses• But AZ is starting to catch up: – First Solar/City of Phx/ASU’s new solar engineering & commercialization certification – ASU’s new PSM (first in U.S.)
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