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New solar cell plant in Hillsboro may usher in better times [The Oregonian] German SolarWorld's plant may help bring recovery after a high-tech slump Sunday, March 25, 2007 RICHARD READ Oregonians have faced an alarming question since the peak of the local semiconductor-manufacturing industry in 2001: Where will the state's growing ranks of young people find good new jobs? This month, a ray of hope shone from the solar sector, an industry growing at 35 percent a year as the world confronts rising energy and environmental concerns. In Oregon's biggest industrial announcement since the tech bust, a German company, SolarWorld Group, said it will hire as many as 1,000 people to make wafers and cells in an unused Hillsboro chip-sector plant. Separately, a solar-panel company is eyeing the Salem area for a sizable factory. It turns out state officials have secretly courted solar companies for years. Oregon, after all, has engineers, line workers and suppliers who know silicon, the main ingredient of microchips and solar panels. The state boasts relatively cheap power, attractive tax breaks, a green image and a prime location next to California -- the world's largest solar market behind Germany and Japan. Could Oregon -- famous for rain -- become a world solar capital, creating family-wage jobs from now until billions of roofs worldwide sprout silicon panels? It could, industry experts say. Last year, Oregon nearly landed a $500 million factory from Japan to make raw material for panels. Economic-development officials say a "large number" of renewable-energy companies are considering Oregon. But states are competing furiously. In California and Pennsylvania, governors wine and dine solar executives from as far as China. To succeed, state officials say, Oregon has to move as boldly as it did to attract multibillion-dollar chip factories in the 1990s and Japanese high-tech plants in the '80s. "This is a huge business opportunity, and Oregon is uniquely positioned to be a real player in North America," says Bruce Laird, a 19-year state economic-development official who handled the deal with SolarWorld, which will invest $440 million. "This whole clean-tech thing is the biggest economic opportunity I've ever seen." If Laird is right, Oregon could hitch its economy to an industry primed to explode as the world switches from fossil fuels to alternative energies. Oregon could see new factories, higher research funding and more solar-installation jobs as well as other retired chip plants going solar. If Laird is wrong, or if Oregon misses the solar train, laid-off chip workers might struggle to replace family-wage jobs. And the state could be left trying to prop up a service economy built on a rickety 1970s platform of timber, farms and fisheries. Washington solar To visualize a solar boom, look no further than Moses Lake, an eastern Washington town billed as "the sunshine city." There, construction cranes rise from potato fields, launching a $600 million addition to a plant owned by REC Group. The Norwegian company, the world's largest maker of polysilicon for solar panels, has made the crystalline substance in Moses Lake since 2002. Leo Cortez, a 31-year-old father of two boys, operates computerized controls of the former semiconductor-silicon factory, which employs more than 250. The plant was once owned by Komatsu, the same Japanese company that spent $500 million on the Hillsboro factory, which SolarWorld is buying for $40 million. Because of declining chip sales forecasts in the late 1990s, Komatsu never opened that plant. The Moses Lake factory, built by Union Carbide Corp. in 1984, stretches three football fields. It contains 67 reactors, many named for U.S. states. Last week, operators in smocks, face masks and hairnets opened the reactor named Oregon and removed 21st-century gold: 99.999999999-percent-pure polysilicon. The workers wore Kevlar wrist guards, breaking up rods of the dull gray material into sharp, glinting chunks. They packed them in 132-pound boxes for shipment to companies similar to SolarWorld. REC's customers grow ingots from the silicon just as chip companies do, slicing the ingots into wafers to make cells for panels that convert sunshine into electricity. Goran Bye, REC's chipper chief executive from Norway, maintains a wry sense of humor while landlocked in sagebrush country far from fjords. Lutefisk, the Nordic fish delicacy, is hard to come by. But cheap hydro power abounds. Bye predicts several more plant expansions during the next 10 years. "Now, everyone and their dog would like to make polysilicon," Bye says. "We are sold out for years to come." Oregon solar Technology experts at the Portland branch of CH2M Hill, a company that designs chip plants and other complex buildings worldwide, saw a solar future for Oregon six years ago. "There is no other state better suited to advance solar power research and manufacturing than Oregon," they wrote in an internal 2001 paper. CH2M Hill, which has designed solar plants, noted the technology's similarities to semiconductors. Both use silicon to make wafers. Both require affordable power, water and industrial land. Chip workers and researchers have the specialized skills for solar. Best of all, the two industries operate on independent cycles. "In the event of a microelectronics downturn," the paper said, "Oregon workers would have a greater likelihood of being reabsorbed by a solar-products employer, rather than needing to leave the state to find a quality replacement job." Oregon semiconductor manufacturing jobs peaked at 34,600 the year the report came out, dropping by 3,200 in 2002. It stood at 30,600 last year. SolarWorld's plans in Hillsboro caused excitement in nearby Intel plants, where workers fret about ongoing layoffs. Earlier this month, Intel executive Bruce Sohn, who oversaw big wafer factories, became president of First Solar Inc., a Phoenix, Ariz., panel maker. Solar jobs ultimately could rival chip employment worldwide, and potentially in Oregon, says Allen Alley, the former Pixelworks Inc. chief executive who advises Gov. Ted Kulongoski. Workers here have not only silicon skills, Alley says, but also a passion for sustainable development that sparks "inspired performance" in clean industries. Global demand is soaring for photovoltaics, products that convert sunlight into electricity. Sales increased by 35 percent in each of the five years ending in 2006, when they exceeded $15 billion. The market will quadruple in 10 years, the Clean Edge Inc. research firm predicts. Oregon's solar industry is small so far, with between 250 and 400 workers and $50 million in annual sales. It includes panel installers and a Bend company called PV Powered Inc. The four-year-old firm, with almost 40 workers, makes inverters that turn solar-panel energy into current suitable for homes and power grids. Gregg Patterson, PV's new chief executive, comes from Hewlett-Packard Co.'s printer business in Vancouver. Oregon politicians get the idea of solar, he says. We're starting to see some real vision and leadership," Patterson says, "from Governor Kulongoski on down." But other states -- and governors -- also have solar fever. On March 6, Pennsylvania Gov. Edward Rendell dispatched a limousine from Harrisburg, Pa., to Baltimore, an 80-mile drive. The Lincoln Continental picked up Roger Efird, president of Maryland-based solar firm Suntech America Inc., and his boss from the Chinese parent company. Rendell hosted dinner in the governor's mansion, urging the executives to put a $200 million solar-panel factory in his state, Efird says. Weeks before, Rendell phoned China to talk with Zhengrong Shi, Suntech Power Holdings Co. chief executive. "The kind of package they offered us to put a factory there is a world beater," Efird says. The incentives would offset savings from low-cost Chinese labor. Next stop for the Suntech execs: California, to meet with Gov. Arnold Schwarzenegger. Oregon -- facing competition from Washington, Nevada, Colorado, Arizona and New Mexico -- is wooing solar companies, too. An undisclosed panel maker is considering the Salem area for a plant that would be "a large opportunity," says Ray Burstedt, president of Sedcor, an economic development agency for Marion and Polk counties. Japanese panel maker Sanyo backed out of a Salem property purchase last year. Oregon legislators are considering expanding tax credits to attract renewable-energy firms. State officials aim to attract players in all three sections of the industry: raw-material production, such as the REC plant; wafer and cell making, as in SolarWorld's factory; and panel making, a la Suntech. Last year, Japan's Tokuyama Corp., which makes polysilicon, considered building a factory near Coos Bay but decided to expand at home. Suntech's Efird says his company began importing panels from China last June. The busy firm has only four U.S. salespeople, including one in Hood River, but has signed $150 million in contracts since Jan. 1. "We don't even have the manpower right now to get out and make sales calls," Efird says. ### Richard Read: 503-294-5135; This article republished from The Oregonian: March 25, 2007 |