This is in regard to the conversation with MSK, and their interest in a manufacturing facility in the US, on the East Coast, and possibly, in Gainesville, Florida. I met the MSK crew by chance at BE05 , which was my first time at that conference, and their first in the US. Mr. Kasahara (president) attended the second day of the event, also by chance, as his schedule on the west coast procuring silicon had wrapped up early. We sat down for maybe 20 minutes, I explained how we are a small community, owners of our own power supply, and in the process of planning for further energy needs next decade. I asked him if he would be interested in possibly having a facility on the East Coast, and he said yes. His concerns were some form of local demand for the end product and access to (physical) distribution routes, such as shipping ports.

He mentioned that this year they are opening up 3 new facilities, 2 in Asia and one in the EU, and that that combined with current global shortage of raw material (silicon or Si) would put back any further expansion to late 2006 or early 2007. It is important to note that PV is enjoying an unprecedented global boom, has been for the last 6 years, and that with the Kyoto Protocol and other demands most manufacturers are backlogged for the coming several years. In this scene, MSK often acts as an OEM for majors such as BP Solar, Shell Solar, Sanyo, Kyocera and the likes. They are to PV what Delphi is to GM, or Flextronics is to Ericsson. So they make their own stuff and manufacture for others. 

PV is dropping in price, increasing in production, expanding in the variety of applications and is positioned to be the global supplier of energy to the developing world, as it can function as a stand-alone power supply, is modular and can supply power to a small radio or a large soccer stadium. Just like many in the developing world had never seen a telephone before they owned a cell phone, so will billions never know what a utility pole looked like when they get their fist solar system.

So this is basically a chance for City of Gainesville to land a PV manufacturer to operate here in town. The upside would be local jobs and product at cost. Product at cost these days means something in the $2.5 or $3/watt range, half of what it retails for, with prices continuing to decline as demand increases. The installation would add another $2.5 to $3/watt, and we could be generating electricity, sans CO2, for $50 to $60/MWh, expensive for base, but well below our peak costs. The great thing about PV is that it comes guaranteed for 25 years, and will probably last 40 or so, and as fossils and solids fluctuate in price, the PV cost remains constant. It is a financial hedge that smooths out the end price to the consumer.

A PV factory is relatively simple to operate, you don't need that much space, and the core mechanics are these Suburban sized machines that the man or woman attendant feeds product in on one side, and patiently waits until it comes out on the other end. The attendant then rolls the product to the next machine, pushes the green button, and waits some more. The last stage is testing the circuitry and fitting the panel (or module in industry terms) with an aluminum frame, attaching a bar code and logging the serial number in a computer. There are typically a dozen or less such machines involved in a single assembly line process.

PV manufacturing is akin to the micro-processing industry in that it requires a clean room (meaning high grade air-handlers) skilled workers, and attention to detail. Since the processing is modular, what could start off as a plant that manufactures 20MW of product a year could later scale to one that manufactures 200MW a year, you just add more Suburban sized machines. We could enable a PV manufacturer to come operate here with a formula that involves a building, cheap energy, some tax-ness and guarantee of local demand. 

I thought is was very fortunate that this came across at a time when energy matters are under consideration, and I promise you I did not seek this out, we were just at the same place at the same time. Then again, the vedics say there are no accidents. Mind you, that this revolution towards RE in general and PV in particular is happening with or without us, and when PV hits critical mass, it will jump squarely in our business space and start nibbling away at our customer base. It will be just a matter of time before the Publixes of the world will get approached by some dude (or dudette) who asks them, what do you pay now, 5.2, I'll give you 4.7, financing included, just sign on the bottom line. 

So, as a shareholder in this utility, regardless of the MSK thing, I want to know what its response is to this shift in technology, and how our utility plans to take advantage of this new value chain. Obviously, ideally, you'd want to be vertical, and if you could, you'd want to fetch reve on the manufacturing, distribution, installation, financing, insurance, servicing, or some combination of the above. I'm not saying City of Gainesville should do all, but it better develop a plan to inhabit the more lucrative parts of the chain, 'cause if not us, somebody else surely will.

If you jog through the links below, you should get a pretty good idea of what a manufacturing plant entails, the growth in the market, who all is getting in on the game, and that if we play host to such a plant, we stand a lot again, especially since we can supply our own needs incrementally, enjoy even lower costs ourselves as prices drop over time, and possibly increase revenue (transfer) if we manage to supply others in Florida with high-quality, competitively priced PV products. (Personally, I'd be curious to see what the incremental introduction of decentralized PV would cost relative to the finance charges associated with the centralized PET coke project favored by the GRU brass, over the lifetime of proposed financing)

Dr. Goswami is familiar with the details of this encounter, I described to him the layout of the discussions so far and mentioned I will be sending Mr. (and Dr.) Kasahara a reply soon with a general thank you and inform him that the idea has been carried over to an official level. Having worked in that part of Asia for some time, I can tell you that the sensei thing carries weight and that as President of the International Solar Energy Society (ISES), Dr. Goswami would be a most excellent conduit through which to pursue this (or any PV opportunity) further.

I would also point out that if the Commission wishes to entertain this idea, to come back with an expression of interest in less than 3 months, and if their response is favorable, to start arranging for more detailed discussions in no less than six month (~September or so), as on their part MSK is planning their global manufacturing deployment schedule at least 18 months ahead of time.

Last, if you did nothing else, you could play this out to see how it goes, just to gain experience for down the road. The video below shows Jerry Stokes, GM for MSK Europe (British dude), Dr. Kasahara (with mustache), and Takahiro Ryuzoji, who is attached to MSK from Kaneka, the supplier of thin film and laminate materials (the exhausted guy who speaks first.) 

Dr. Goswami email goswami@ufl.edu
Dr. Goswami tel: 392-0812