Legislative Happenings
Vote-by-Mail
by Gary Bischoff

"I'd put my money on the sun and solar energy." - Thomas A. Edison

Last week there was an important announcement here in Ulster County. The Solar Energy Consortium, a research and development group is making plans to move into a 300,000-square-foot space at Tech City, the former IBM plant in the town of Ulster. The group plans to be a significant player in the growing solar movement and create up to 300 jobs. The Consortium still needs to pull together financing before starting operation, but this announcement puts this area into a strong position in an industry that is sure to experience significant growth in the next decade and beyond.

The Solar Energy Consortium announcement came at a time when the Saugerties Economic Development Committee (SEDC) was looking at the solar industry. Vernon Benjamin wrote an excellent paper for SEDC on the potential of the solar industry locally. The full paper called A Light at the End of the Corridor, Solar New York 2007 Conference, Report & Recommendation is available on my web site. This is a well-researched look at the industry and discusses the potential for creating a local solar industry cluster.

So just what is a cluster?

A cluster is defined as a concentration of companies and industries in a geographic region that are interconnected by one or more common things such as, markets they serve, the products they produce, trade associations, educational institutions, core technologies, natural resources, labor force, distribution channels, production processes and so on.

Our economic development people, government officials and company executives must be aware of the what is needed to form a cluster. Innovation, imitation, and entrepreneurship are what propel most clusters. While the success of an individual firm may depend on its ability to protect its own technological advances, new products, or designs, the success of the cluster in which it operates depends on the opposite—widespread diffusion, access to new innovations and information, and spin-offs of new enterprises. The communication and close relationship of companies within the cluster presses competitors to continually improve and innovate in order to maintain their advantages over imitators.

Most clusters spring from either a large company or a university. In our situation, the presence of some small companies already in the area and the addition of the Solar Energy Consortium at Tech City could prove to be a catalyst that starts a local solar industry cluster.
The solar industry is one of the fastest growing industries in the world. According to Marketbuzz, the solar photovoltaic (PV) market grew 19% in 2006, with the United States market at $5.2 billion. There was almost eight times the amount of photovoltaic solar panels installed in German than the United States last year, which leads me to believe that there is a tremendous opportunity for growth in this country.

New technology is being developed in solar photovoltaic systems. With electricity prices going up, conditions are right for investment in the PV systems. The basic challenges with solar energy are the same as they have been since the 1970s – to make solar energy cost competitive with fossil fuels. There have been advances in material science, and manufacturing processes that are making solar much more attractive. There is a surge in venture capital activity to meet the growing interest overall in clean technologies. In many ways, it’s like the Internet boom of the late 1990s. Brighter economic prospects for clean energy are pushing companies to manufacture more efficient solar panels, which will improve the cost per kilowatt for consumers. Solar PV systems are still more expensive than purchasing electricity generated from fossil fuels or nuclear power, but the industry is making progress. The high cost of silicon, the material that converts light to electricity in most solar panels today, is one of the biggest barriers to lowering the cost of solar PV systems.

Solar Energy prices have declined on average 4% per year over the past 15 years because of increases in conversion efficiencies and manufacturing economies of scale. Because of the cost increases from electricity suppliers, there is a demand for solar energy that will provide significant growth in the industry, which will benefit us in Ulster County.