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Retooling American Manufacturing to Drive for Energy Independence

08/30/2009 05:12 am 05:12:01 | Updated May 25, 2011

The federal government is in a tremendously tenuous spot right now managing one of the worst financial crises in history, while simultaneously trying to wean the American economy off of fossil fuels. These efforts, portrayed by many as two separate and competing interests, are actually more synergistic than most people realize.

For example, the recently announced Cash for Clunkers program is designed to encourage new purchases of fuel-efficient cars thereby reducing fossil-fuel consumption and generating demand throughout the automotive supply chain. The program is ambitious and could have a positive impact, but economists say more will be needed to help preserve the automotive manufacturing jobs already lost.

Interestingly enough, the solar industry may be an answer provided there is the necessary support to keep solar manufacturing jobs in the US and stimulate growth. Already we have seen solar manufacturers with large scale solar designs ready for mass production explore the automotive industry as a potential manufacturing partner.

There are several arguments for leveraging America's vast manufacturing capacity to drive a new era in solar manufacturing and adoption, including sustainability and economic diversification.

Sustainability: Going Green The Green Way

To truly green the economy we must not only consider the energy and products we use, but where they came from. Of course a shift from fossil fuels to solar energy has tremendous environmental benefits, but to build a brand new facility to support solar manufacturing is not the ideal 'green' solution, particularly when existing plants can be retooled.

By considering the "footprint" of solar manufacturing, we can actually help accelerate solar adoption. Even with public support behind the solar movement today, there are major, but necessary, hurdles. For instance, Environmental Impact Reports (EIRs), while important, are a long and laborious bureaucratic process often taking over one year to several years to complete. However, if solar materials can be made with existing facilities and technology, any EIR and zoning issues are moot and plants can be up and running again quickly.

Diversification: Recession Proofing Susceptible Regions

One lesson we can take from the faltering auto industry is that diversification is a cornerstone of job security in any region. Much of the industrial and engineering jobs in the Heartland and parts of the South were dependent on the auto industry, and therefore many workers and families were bound to that industry's fate.

If we look at Silicon Valley, for example, the region has been able to somewhat weather this latest economic storm because of its wealth of industry diversification including bio-technology, renewable energy, high-tech, software and electronics. These are industries that are less likely to all struggle simultaneously reducing the impact of a recession. A growing solar market will provide opportunity for already or soon to be ex-manufacturing plants, allowing them to rehire their work forces in regions of the country decimated by the fall of the auto industry.

The opportunities to retool idle facilities are vast. Here in the Bay Area, the recently closed NUMMI auto shop in Fremont has a 420,000 vehicle capacity, but its machinery is sitting idle. Some of this equipment could be retooled to roll out a variety of solar system materials, and it can be done with limited operational time and cost.

The recently announced V Vehicles plant in Louisiana demonstrates the importance of this concept. A previously decommissioned auto plant in Monroe, Louisiana, is now being utilized to develop electric vehicles, an endeavor that will create around 1,400 jobs in the area.

Getting Policy Involved

To see how policy sets the stage for industrial growth, we need only look to solar-market leaders, Germany and Spain. While Spain succeeded in part through tax incentives, Germany provided businesses with an aggressive 50-percent subsidy for companies that manufactured solar products domestically. By combining both rebates and tax incentives into its policy, the German government promoted and maintained healthy manufacturing and engineering jobs.

Federal programs in the U.S. have lagged behind European measures. In 2008, a program that provided a 30-percent tax credit for solar installations went through 13 unsuccessful attempts for renewal, causing venture capitalists to tighten investments in solar. Finally, last October the credit was renewed for another eight years.

While this program is a good start, the government must level the playing field between U.S. and overseas manufacturers, which can provide materials at a fraction of the cost of the U.S. By encouraging domestic manufacturing through tax incentives and rebates, the Federal government can help establish the U.S. as the leader in all things solar while energizing the economy.

Conclusion

The U.S. has a huge opportunity here. Federal programs are still in need of a massive overhaul, and to position America as the true solar leader, much more legislation is still needed. Retooling and reusing existing facilities is an intriguing and exciting topic, one that I hope continues to receive support from the public and private sector.