By Steven Mufson
Washington Post Staff Writer
Monday, November 20, 2006
The top of a large steel vat gently swings open, and a slab of silicon, cut into pieces the size of large bricks, is lifted onto a conveyor belt. On a mezzanine above the warehouse-style floor of the factory in Frederick, Bill Good is monitoring the six-foot furnaces that melt the silicon that goes into bricks, which are later sliced into wafers and turned into solar panels in a building next door.
Good, 53, used to work in a landscaping business, but like many people around the country he has found work in the alternative-energy industry. After two years, he said, "I could retire here."
That's the sort of job certainty many workers would envy. Growth in the solar, wind power and biofuel sectors has been fast and promises to be enduring. Last Thursday, BP PLC's solar division announced a $70 million plan to double the capacity of the Frederick factory and hire 70 more people.
"The demand for solar energy is so strong, not only in the United States but around the world, that we have to keep up," Lee Edwards, chief executive of BP Solar, said at a ceremony attended by Maryland politicians, congressional aides, BP employees and a group of local elementary-school pupils.
Many boosters of solar, wind and biofuels have tried to sell them as pieces of a new American economy, but these nascent industries rely on many of the same skills and materials as the old American economy-- and that's good for people looking for jobs.
The wind turbines installed by Madison Gas and Electric Co. in Wisconsin, for example, were placed on towers that weigh 73 1/2 tons, mostly made of steel. They were built in Shreveport, La. Wind turbines also use components common in many endangered U.S. industries, such as gearboxes, rotors, control systems, disc brakes, yaw motors and drives, and bearings.
"What we need are policies that advance the climate for investment in these products," says Marco Trbovich, communications director for the United Steelworkers of America.
The ethanol sector has been adding jobs, too. In August, U.S. refineries produced 27 percent more ethanol than a year earlier, and 48 distilleries are under construction. Meanwhile, the solar industry has about 20,000 jobs nationwide, said Rhone Resch, president of the Solar Energy Industries Association. That's a small number, but Resch said it is growing by 35 percent a year.
Expansions like BP's add another reason -- along with environmental concerns and national security -- for the boosters of solar, wind power and biofuels to use in pleading for more government support in the form of purchases, targets, import limits, subsidies and tax breaks for alternative energy. The Apollo Alliance -- a group of environmentalists, alternate energy companies and unions -- said in a 2004 report that a $30 billion federal program could create 3.3 million jobs over 10 years.
That sort of spending isn't likely, so the report's optimistic forecast won't be tested. But many governors and mayors are realizing that fostering renewable energy can be good for their states and cities. Under Gov. Edward G. Rendell (D), Pennsylvania has become a major purchaser of "green energy." The jobs created, while modest in number, have symbolic importance and make a difference in individual communities. In March, after receiving financing from the state and assurances from Rendell, Spanish wind power company Gamesa Energy said it would invest $34 million to manufacture towers and blades for wind turbines in Fairless Hills, Pa., which was hit hard by the closing of the last U.S. Steel Corp. facilities there in 2001. Gamesa said it expected to create 530 jobs.
Many of the jobs are good ones, in contrast to the low-wage food-service jobs that have bolstered employment statistics without improving quality of life for the people who hold them. "You're producing high-quality manufacturing jobs when others are moving out of the United States," Resch said. "If you look at the next high-tech growth industry in the United States, it can and should be solar energy."
Jigar Shah, 32, started a solar installation and financing company, Sun Edison LLC, in the basement of his District home in 2003. Now he employs 150 people. Shah gets stores, warehouses and factories to let him buy, install and maintain solar panels on their roofs and he gives them 10- to 20-year contracts for energy with set prices. That way companies don't need to make the initial investment for the panels, whose payback periods can be long.
One of Sun Edison's first customers was a Whole Foods Market in Edgewater, N.J. With backing from Goldman Sachs & Co., Shah bought solar panels and installed them on the store's roof. Sun Edison retained a small stake in the system while Goldman Sachs owns the rest. Whole Foods got a contract for energy that rises a modest 2 percent or so a year for more than a decade.
By making Goldman Sachs a partner, Shah got not only financing but also credibility. He also made sure that the 30 percent federal tax credit for solar panels weren't wasted on Sun Edison, whose profit wasn't big enough to make use of them all.
When the panels were installed in January 2004, Whole Foods was paying about 1 percent less than utility rates for electricity. But rates have since soared and now the store's power costs about 20 percent less than the electricity sold by the local utility, a bonus for its effort to promote an environmentalist image.
If utilities start charging customers more for electricity during peak-usage periods -- around midday and early afternoon, when solar power is most available, the solar business could get another boost.
While Shah started his company in the District and put its headquarters in Baltimore, most of Sun Edison's business has been in such states as California, New Jersey and Arizona, where government incentives for solar power are best.
Shah said he might move the company because of obstacles that make this area one of the toughest for solar installations. He complained that area utilities demand interconnection studies and require expensive safety equipment that is not required elsewhere.
Pepco executive Stephen Sunderhauf said there are safety issues, such as protecting people who are repairing downed lines, and technical limitations.
Shah also lamented that Maryland's budget for renewable energy is tiny compared with New Jersey's or California's.
"It's a real shame to me that BP Solar is building all this manufacturing capacity in Maryland and virtually none of that product will stay in Maryland to help citizens get over the rate increase," Shah said.
But BP is thinking about more than Maryland. It acquired a half-interest in the Frederick plant when it bought Amoco Corp. in 1999; it bought the rest from Enron Corp. Now it has about 15 percent of the U.S. solar market, BP's Edwards said last week.
As he spoke in the plant's control room, silicon wafers in another part of the plant were being cleaned, polished, stamped with silver wires, backed with aluminum, hooked together and placed under protective glass. To check their durability, some panels were tested in machines that simulate harsh weather -- extreme cold or heat, high humidity and one-inch hailstones traveling at 52 mph.
If they last as long as planned, solar panels might become competitive without government subsidies. Edwards said that every time industry capacity doubles, the cost of panels falls about 20 percent.
Capacity has doubled over the past three years, but costs haven't dropped as much as expected because of a silicon shortage. Eventually, though, Edwards said that "if we can keep driving costs lower, we will reach a point where solar is the same price as grid power."