Kyocera Solar is a Scottsdale, Arizona-based firm which is a major producer of solar energy products, including solar panels and systems. The firm recently announced a plan to double its production over the next few years due to demand. We spoke with Tom Dyer, Vice President of Marketing and Government Affairs at Kyocera Solar to get some insight into the market and the solar industry.
Techrockies: Thanks for the interview. Tell us a little bit about your recent expansion announcement--what were the reasons behind the expansion, and how fast will it take to ramp up your production?
Tom Dyer: The growth rate of the business is about 30 percent a year or higher in the U.S. We're projecting a 30 percent compound annual growth rate over the next 10 years. That expansion is matching the growth worldwide, which is similar in percentage. The ramp up isn't a switch from where we are today to the new level the next day, it's ramps up rather linearly from where we are to the new level. The groundbreaking of our facility in Mexico is in June, with equipment in December, and ramp up in January, up to our goal over the next three years. Techrockies: We've heard that there is waiting list for equipment for solar equipment, and there's quite a bit of demand and shortages. Is that correct?
Tom Dyer: That's correct. We had 256 megawatts of capacity in 2006, but only delivered 180 megawatts. That shortfall was due to a shortage of silicon, the purified silicon that we and other manufacturers use, which is the limiting factor. That's why demand exceeds supply. That will start to be relieved in 2008, and we have secured contracts to fulfill the capacity we discussed in our press release. There has been a shortage of silicon, and we've taken steps to overcome that.
Techrockies: Is it commercial or residential usage that is driving the demand?
Tom Dyer: The demand is twofold. The commercial demand is higher today because of the 30% federal tax incentive, which is uncapped. For residential users, the incentive is capped at $2000. Because of that, there's a natural tendency to go towards the commercial sector. However, there is legislation in front of the House and Senate now, which removes the cap and will even that out a little bit. If you look at residential and commercial applications, California, which is the largest U.S. market, was evenly divided between the two in 2006, with a 50% split between commercial and residential. Recent reservations show there's a lean towards commercial because of how the incentives are structured.
Techrockies: We see lots of new firms working on new technology like solar concentrators, venture investments in companies, and press releases all the time on new develops in solar. How is this impacting the business?
Tom Dyer: Quite frankly, lots of companies are looking to do IPOs, or looking for investment. I'm not singling out any company, but there will be a tendency to try to get some excitement around a technology or business model. That's good, because you need to have lots of people who see the viability of the business as a whole, but we've also seen people who haven't been in the business. For example, Applied Materials, a technology business in the Bay Area now has a solar division, and was not in the solar business two or three years ago. We are both seeing newcomers and established high tech businesses in the space. We have been in this for 37 years, and this is not new to us. We welcome everyone joining in with us as a group, which is the way we will achieve cost reductions to make solar a mainstream energy generator in the long term, and so we can reach cost parity with fossil fuels and other energy generation. We're excited about all of this going on, helping out in that area, and we welcome the competition.
Techrockies: Thanks for the interview!