Joseph Lindmayer doesn't wear his solar-powered watch anymore.
A few years ago, it was a great gimmick. After all, as the chairman of Solarex Corp., the world's leading producer of photovoltaic solar cells, he had to do his best to promote the uses of solar power. The solar wristwatch seemed a good demonstration tool.
But times have changed. After years as a small company turning out a handful of solar cells for mostly experimental uses, Rockville-based Solarex has now geared up for a full-scale manufacturing and marketing push aimed at proving that sun-generated electricity can be used to power factories and for other large-scale commercial uses. Given the seriousness of that effort, the idea of a solar watch is now a bit frivolous. Besides, Lindmayer's hi-tech sundial never worked very well, frankly (problems with the mechanism, not the cells, mind you).
Solarex's new showpiece is a $6 million, 25,000-squarefoot plant in Frederick. Due to open later this year, the facility will be the largest solar-powered factory ever built. It will make solar cells and panels, hence its description by Solarex as a solar "breeder" -- a plant that uses power from the sun to make more devices that produce power from the sun.
The products made at the Frederick plant are based on technology, invented by Lindmayer, that uses refined silicon to convert the light of the sun into electricity. Silicon blocks cast by Semix Inc., a Solarex subsidiary, are sliced wafer-thin, and the resulting plates are then polished and fitted with electrodes to make solar cells that are usually about 4 inches square. Then the cells are grouped into panels of various shapes and sizes. Solarex claims its technology is more efficient than competing silicon technology because it produces square, rather than round, cells that can be grouped more densely on a panel.
Because solar energy still costs far more to produce than conventional electricity, the Frederick plant will be a money-loser. But Solarex is betting that the technological and promotional benefits of the facility will outweigh the costs. "The payback will not be only the site itself," Lindmayer says. "It will be like a marketing expense."
Still, Solarex is not in a rush to "solarize" its other manufacturing plants, including a new Semix facility in Martinsburg, W. Va., that will produce the silicon blocks from molten sand. "If we start to solarize everything, it will not be economic," Lindmayer concedes. "I still admit that utilities are cheaper."
Indeed, producing electricity from the sun at prices competitive with other sources has always been the challenge faced by the photovoltaic industry. Although the cost has been dropping steadily for several years, the price of producing a watt of electricity from a photovoltaic cell is still about $8, compared to about $1 a watt for electricity from conventional power sources.
Lindmayer believes that photovoltaics can achieve the $1-a-watt figure by the end of this decade. But while it works to bring the cost down, the solar industry is faced with a Catch-22 of sorts: mass production lowers the price of the cells, but the cost is still too high to encourage mass production.
"We will cut the price," Lindmayer says. "But how much will depend on the size of the business. It's very important to expand the business.
"We are too far ahead on the technology," he adds. "The educational level and the acceptance is going to be the limiting element.... The educational barrier is enormous."
That's the reason the thrust of Solarex's business has changed since the days when Lindmayer wore his solar watch. Founded by the Hungarian-born Lindmayer and another former Communications Satellite Corp. engineer in 1973, Solarex's sales have grown quickly over the years -- at one point they were doubling annually -- and the company now has yearly revenues of more than $20 million. The company has expanded in the past few years from a squat building off of I-270 into several other buildings nearby.
Lindmayer claims that Solarex has about 40 percent of the market for photovoltaic cells, a boast generally confirmed by independent analysts, and the company's success has drawn attention from much larger companies: Standard Oil Co. (Indiana) began buying into privately held Solarex in 1978 and now holds about 30 percent of the stock. Foreign interests and institutions own another 10 percent or so.
Although the company has from time to time considered going public, Lindmayer says he would prefer that Solarex be "a little more mature" before bringing it to the investment community. Private ownership, he adds, allows Solarex to operate at a loss -- as it will this year -- without investor pressure, while it plows its funds into expansion.
Although most of the company's expenses in recent years have been for research and development, manufacturing and marketing are now taking larger chunks of the budget. As at many maturing high-tech companies, the heavy concentration of scientists in Solarex's management is now being diluted by an influx of professional managers. The souvenirs of Lindmayer's scientific background have now been joined in his office by a sales-motivation poster.
But Solarex's ability to market its products is being hindered by the recession and by the Reagan administration's de-emphasis on development of photovoltaics as an alternative source of energy, according to Lindmayer.
Because the installation of solar cells is expensive, the recession's dulling effect on capital spending has hindered Solarex's efforts. "For the first time, we're beginning to see the effect of the recession," Lindmayer says.
More important, he says, some customers and investors are being scared off by the administration's stance on solar energy. While the Carter administration pumped millions into solar research and marketing and set ambitious goals for reduction in the costs of photovoltaics, the Energy Department has now drastically scaled back its efforts in these areas.
The DOE budget for photovoltaics has dropped from $150 million in fiscal 1981 to $70 million this year, and the Reagan administration has requested an expenditure of $27 million on them in 1983, according to Robert San Martin, deputy assistant secretary for renewable energy.
Previous government efforts in the photovoltaic field were "very much in a leadership position," San Martin says, with heavy emphasis on the marketing of solar technology. Now, virtually all of the spending is directed toward research on new types of photovoltaic technology, because the government believes the solar-cell industry has grown enough that it can handle its own marketing.
"Now that an industrial base is being established, it's more important that federal efforts concentrate on the research and risk-taking portion and that industry go ahead in exploiting the marketplace," San Martin says.
The cuts in government spending on photovoltaics have had little direct effect on Solarex, according to Lindmayer.
"But we are hard hit by the philosophy, rather than the money," he adds. "It's tough to have the administration saying there is no need for alternative energy."
As a result, according to Lindmayer, potential customers and investors are reluctant to commit to solar technology because of what they see as a lack of government confidence in it. "In a number of instances, it has damaged us very badly," he says.
The company also faces challenges in the form of competition from other photovoltaic technologies. One involves making cells out of a thin film of amorphous silicon; another, being developed by Mobil Corp.'s Mobil Tyco Solar Energy Corp. division, draws a ribbon of molten silicon from a vat, cools it, and then cuts it into 4-inch lengths.
Lindmayer, defending Solarex's technology, says the other processes were in existence when the company was formed, but Solarex chose to use the technique of slicing silicon into wafers. "We all bet on horses," he says.
Lindmayer claims that the Solarex process produces solar cells that are more efficient than those made using the other technologies. Effective solar cells convert about 10 percent of the sun's energy into electricity, and Lindmayer says his products better that. The less efficient the cells, the more roof-mounted solar panels a house, for instance, will need to get the same amount of electricity.
Solarex hopes that its "breeder" will prove that the company's technology is the best, and that photovoltaics are a practical alternative for big commercial applications. "The breeder is really at the level of large-scale use of photovoltaics."