Solar Flair

Solar Energy and the Smaller Manufacturer

Renewable Energy Consumption GraphicToday, solar energy is in what I think of as an adolescent phase. While solar energy is a commercial reality, it constitutes only about 1% of America’s energy supply[i]. At the same time, solar energy is one of its fastest growing industries — America added 1,855 megawatts of photovoltaic (PV) capacity in 2011, 109% more than in 2010![ii] This rapid growth is accompanied by a continuing stream of technical innovations and with a breath-taking decrease in costs. Solar panel supplier’s prices nose-dived over 50% in 2011 alone as volume and competition increased.

Further, this is a global industry. Demand is global: America’s 1,855 megawatts constituted about 7% of global installations in 2011. Supply is global: China and the U.S. are now in a trade row over panel prices. And technical innovations seem to be coming from everywhere.

Trends and Directions

Photovoltaic solar (PV) power generation is intrinsically modular. It can be deployed as utility – sized installations feeding regional or national power grids. It can be deployed locally as a power source for individual applications, like traffic signals or garden lighting. And it can be deployed on almost any scale in between.

Today’s aging electric power grids are being re-examined to an unprecedented extent. Last year’s earthquake and tsunami in Japan has called nuclear power generation into such question that Germany has decided to phase out all nuclear power plants by 2022, and to replace them with renewable energy. Other nations may well follow. A recent 14 – page special report in The Economist[iii] discusses this in detail. Coal fired power generation remains under environmental pressure (including a carbon tax on new coal fired facilities, announced as this post is being written). In the U.S., nuclear and coal fired facilities are source to 10% and 48% respectively of U.S. electric power. Many of these power plants are nearing the end of their design life.

The modular nature of PV solar power generation makes it practicable to replace highly centralized coal fired or nuclear facilities with smaller, localized power sources. Utility scale facilities would complement roof top installations. Of course, the architecture of such a power grid needs more than PVs, and the costs involved have to be viable. As mentioned before in this blog[iv], the folks at the Rocky Mountain Institute[v] have published an extensive study on how this transition can actually be accomplished.

What Does a Smaller Manufacturer Do?

PV Array ImageIt appears that manufacturing, at least in America, is actually emerging from a long and bitter recession. Upon emerging, manufacturers are finding that today’s economic realities are much different from those of the boom days prior to the financial meltdown.
Globalization, Sustainability, constrained resource availability and $100+ oil are a few of the factors that have moved from peripheral concerns to mainstream issues.

  • These new realities need be addressed at the strategic level. A well thought out Sustainability Plan should be part of that. Energy should be a major component of that Plan, including new energy sources, such as solar. There is no one-size-fits-all or cookie cutter approach. Each business unit needs to tailor its planning to the specifics of its situation and its objectives. Failing to plan is planning to fail.

  • As important as it is to have a Plan, some things are so obvious that they should not wait. Energy utilization improvements, for example, can start immediately — capital costs and down-side risks are manageable, while immediate and positive results are likely, gratifying and motivating. If you have not already done so, conduct an energy utilization audit[vi].

  • Solar panels that convert sunlight directly into usable electricity have become an icon of our times. Don’t overlook the motivational value of a PV installation. Small installations — such as an office building or laboratory — may be inexpensive to do, offer a high ROI and go far to engage people.

  • New realities and rapid change present a multitude of opportunities, both on the operation (cost) side and on the marketing (revenues) side. Be very alert to new product and new market possibilities.

Thoughtful comments and experience reports are always appreciated. Click on the title of this post to open the comments section.

…  Chuck Harrington

: When you are ready to address Sustainability planning in your business, contact me at:

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Solar panel photo courtesy of Matt Bonnstetter,

[i] U.S. Department of Energy, Energy Information Administration, Annual Energy Outlook 2012 Early Release (

[ii] U.S. Solar Market Insight Report, Solar Energy Industries Association (SEIA) and GTM Research (

[iii] “Nuclear Energy — The Dream that Failed” in The Economist, March 10th – 16th 2012, page 54f

[v] Lovins, Amory, Reinventing Fire, Chelsea Green Publishing, White River Junction VT (2011), Chapter 5. Also see the Rocky Mountain Institute’s website at

[vi] See “Energy Efficiency Audit – a No-Brainer”, this blog,