In The Boardroom With...
Marc Cortez
Director of Marketing
Sharp Electronics Solar Energy Solutions Group
www.sharpusa.com/solar
SecuritySolutionsWatch.com: Thank
you for joining us today, Marc. Please tell us your role at Sharp Solar.
Marc Cortez: I am the Director of Marketing for Sharp Electronics
Solar Energy Solutions Group.
SecuritySolutionsWatch.com: Please give us a brief history of Sharp Solar.
Marc Cortez: Sharp Solar is the largest solar cell manufacturer
in the world, with an overall capacity of 600 megawatts. We started the
development of solar cells in 1959 and began mass production in 1963.
Sharp is also the U.S. market leader and began solar assembly operations
at its Memphis production facility in October 2003 to meet the increasing
domestic demand for solar energy. With an annual production capacity of
60 MW, the Memphis manufacturing facility today assembles a variety of
solar panels for residential and commercial installations, including integrated
solar roof modules. As a corporation, Sharp is committed to achieving
zero global warming impact by 2010, part of its long term commitment to
solar and to the environment. You can find further information on Sharp’s
commitment to solar energy and its solar product line online at www.sharpusa.com/solar.
Sharp Electronics Corporation is the U.S. subsidiary of Sharp Corporation,
Osaka, Japan.
SecuritySolutionsWatch.com: Congratulations on your recent announcement
regarding Sharp's supply of solar modules to the largest privately owned
solar installation in Northern California. Can you tell us about this
project?
Marc Cortez: The installation you refer to is Tony’s Fine
Foods in West Sacramento. A family-owned business, Tony’s Fine Foods
provides fresh and frozen foods to the retail grocery and food services
industry throughout the West Coast. Sharp’s Solar Group provided
the solar modules for the 1.2 megawatt (MW) roof-top and ground-mounted
solar electric system, which powers the company’s large frozen and
refrigerated food distribution warehouse in West Sacramento.
Powered by 5,782 Sharp 208 watt solar modules, the solar system is both
a statement for clean, renewable energy and a smart financial decision.
It is expected to generate 1.5 million kilowatt hours annually, accounting
for more than 40% of Tony’s Fine Foods energy needs and reducing
the company’s electric bills by $22,000 per month. With a rebate
sponsored by PG&E, the initial cost of the system was reduced by half.
The solar electric system covers an area the size of three football fields,
and is the result of a collaboration between multiple partners, including
the Sharp Solar Energy Solutions Group; Solar Development Inc, which designed
and installed the system; Sun Link, manufacturer of the mounting system;
SatCon, supplier of the inverters; and Team Solar, a Sacramento-based
electrical contractor that managed construction.
SecuritySolutionsWatch.com: What are the major market drivers for
solar energy at this time? Is the Green Movement part of it?
Marc Cortez: The solar market is being driven by a number of factors.
First, as you mentioned, the consumer Green Movement is absolutely a driver
of market growth. In a recent poll Sharp conducted, it was found that
eight out of ten Americans believe that homebuilders should offer solar
power as an option for all new home construction, and two-thirds of Americans
would be willing to pay a premium for homes that have solar installed.
We believe that part of the reason for this increased support is because
of the attention that energy is getting in the national media these days.
Another part of the huge growth is certainly driven by the progressive
legislative environments in the state and federal governments. California’s
Million Solar Roofs Initiative gave multi-year funding to the state solar
program, which provides market stability to manufacturers like Sharp who
need to invest in plants and resources to satisfy the market. In turn,
the federal government offers tax incentives to those who install solar,
which helps further public awareness and acceptance.
Still another part of market growth – and certainly the one that
gets a lot of attention from the venture capital community – is
the progression of technology. While silicon is still the primary component
used in manufacturing solar cells, most manufacturers are finding new
and better ways to use silicon to maximize their yields. Also, because
of the recent shortages in this raw material (silicon), the market is
rapidly developing alternate technologies that either use much less silicon
(like thin-film) or other, non-silicon based materials.
SecuritySolutionsWatch.com: We assume that with oil in $60 - $70 range
and, in the opinion of many analysts, spiking higher from time to time,
solar is becoming more cost effective. Do we have that right? Please also
give us an overview of the Government incentives currently available at
the Federal and State level.
Marc Cortez: We’re always quite cautious in comparing conventional
energy sources with solar, simply because the comparisons are rarely equal.
All energy sources are subsidized by the government in one form or another
– oil especially so – and yet those subsidized costs are not
usually included in the cost comparisons against solar. What is the real,
unsubsidized cost of a gallon of gas, for example, or the unsubsidized
cost of a kilowatt-hour available from the utility? So because these costs
have already been internalized by the American public – and solar’s
number, because it’s so new has yet to be equally understood –
the comparison is often apples to oranges.
But, as a general rule, conventional sources of energy are increasing
in price while at the same time the cost of solar is decreasing. At some
point these cost lines will intersect, and solar will achieve parity with
the grid. At that point and thereafter, solar will be simply a more cost
effective source of energy. And because solar uses equipment with no moving
parts and therefore is virtually maintenance free, and it uses a clean,
renewable energy source, it will continue to be cost effective while at
the same time providing energy in a way that is better for the environment.
Right now, the IRS awards a federal tax credit of 30% of the cost of a
solar system, without limit to commercial installations and capped at
$2,000 for home installations. In addition, many local utilities offer
rebates per watt installed. For example, Southern California Edison provides
a rebate to homeowners of $2.60 per watt, or $2,600 per kilowatt. I should
note that these tax credits and rebate programs are not permanent. Some
will expire at a certain date or after a pool of allotted funds are depleted.
We, and others in the solar industry, are urging lawmakers to extend these
credits and rebates.
SecuritySolutionsWatch.com: We understand that there are 3 major markets
for solar right now: residential, commercial and utility. Please give
our audience an overview of these 3 markets. How do you reach these markets?
Which market is growing the fastest?
Marc Cortez: In terms of sales volume, the residential market
and commercial markets are about equal, while the utility market is an
emerging – but potentially huge – market. The residential
market includes existing homes that add solar panels to the roof (termed
“retrofit”) as well as new home construction where solar panels
might be included as a standard feature,. Sharp recently launched a new
racking system into this segment, called the Solar Racking System (SRS)
that was designed to save time during rooftop installations and offer
customers a better rooftop aesthetic. We view the residential market as
a foundation of the solar market and will continue to offer new and better
solutions.
The commercial market is growing quickly and consists of commercial entities
such as Google’s offices in Mountain View, California; FedEx's facility
in Oakland, California; Patagonia's headquarters in Ventura, California;
Tony’s Fine Foods in West Sacramento, California; and Sharp’s
own Kameyama #2 plant in Japan, the largest rooftop solar system in the
world. As you might imagine, commercial system owners are concerned about
solar’s bottom line - saving money on their electric bills, giving
themselves a hedge against rate increases, ensuring surety of electric
costs – and are increasingly viewing solar as a way to manage their
costs. Of course, installing solar on a commercial building generates
a lot of positive buzz about a company and their public image, so that’s
a factor as well.
The utility market is emerging rapidly as a way to get the benefits of
solar to as many people as possible with the least amount of cost. These
installations typically consist of large solar fields: solar panels mounted
on movable tracks that rotate the panels in order to directly face and
capture the rays of the sun throughout the day. We are working on a new
concentrator technology for utility applications where devices concentrate
sunlight to a factor of 700X on a single cell, which then produces electricity
at intensified levels. Of course, solar fields can use standard solar
panels as well, and so we’re finding more and more interest from
the utility segment in developing multiple-use-solar sites.
As for reaching these markets, we do a considerable amount of business-to-business
outreach from our headquarters in Huntington Beach, California. As the
market leader we view it as both an honor and a responsibility to educate
the public about the numerous benefits of solar; and so we are stepping
up our promotions to both the consumer and trades. Our new business-to-business
campaign, highlighted by the slogan “It’s On,” is reaching
out to our current installer base and helping them understand the benefits
of the new systems and tools we’re creating to make it easier for
them to conduct their businesses. And our new “Hello Sunshine”
consumer campaign will both educate the public about solar and show people
how easy and cost effective it is now to add solar to their homes.
SecuritySolutionsWatch.com: What about the international market? Germany
and Japan seem to be 2 of the largest international markets for solar
energy. Why?
Marc Cortez: The top three worldwide solar markets are Germany,
Japan, and the United States, in that order. One of the most interesting
facets of the solar industry is that the best markets for solar are not
necessarily the best places for sun – Germany, Japan and the San
Francisco Bay Area are not exactly known for their sun, and yet they are
the most vibrant solar markets in the world. This is because the best
solar markets are driven by aggressive government tariffs and rebates.
Germany and Japan have “feed-in tariffs,” where solar owners
are paid for the amount of solar electricity they create; in Germany,
for example, it’s often more lucrative to cover a field with solar
than it is to cover it in crops. The U.S. solar market is currently driven
by sales rebates, where solar owners are given a rebate at the time of
purchase to offset the costs of installing solar.
In the United States, we see the political winds changing as governmental
support is both increasing in value and spreading in numbers of federal
and state incentive programs. For example, Governor Schwarzenegger recently
signed into law the “million solar roofs initiative,” setting
aggressive goals for installing solar systems throughout the state of
California. It’s interesting to note that California is the third
largest user of solar worldwide.
SecuritySolutionsWatch.com: What are the product advantages Sharp offers
vs. other solar companies, and what is your niche in the marketplace?
Marc Cortez: Since we’ve been in the solar business so long
(since 1959), our 25-year module warranty has a wealth of data and experience
behind it. We’re able to say that we’ve had modules in the
field for as long as our warranty covers; and that brings with it a sense
of consumer trust. And so our long history, our innovative leadership,
and the 25-year warranty we offer on our solar panels make us a trusted
supplier of solar energy to commercial and individual consumers alike.
These comprise our foundation.
We also continue to innovate and develop not only new products but new
ways of conducting business. Last year we introduced a roof-integrated
solar module, one that replaces five (5) standard concrete tiles and integrates
seamlessly onto a rooftop. Last month we launched our new Solar Racking
System (SRS), which is designed to streamline installation and give homeowners
a better rooftop aesthetic. And we also continually refine our module
offerings to ensure they’re meeting the ever-changing expectations
of our dynamic market segments. On the business front, we recently announced
a new arrangement with a nationwide bank to offer tax-advantaged home
equity financing for homeowners installing solar systems anywhere in the
United States.
SecuritySolutionsWatch.com: Are there 2 or 3 success stories you would
like to talk about?
Marc Cortez: The thing we’re most proud of is how many people
we’ve been able to touch with the benefits of solar. Our solar cells
are installed on literally thousands of homes and businesses, and that
number is growing daily. On the commercial end, our work at FedEx’s
Oakland Airport Distribution Center highlighted how a 900+ kilowatt array
can help a progressive company save thousands of dollars in operations
costs and help them manage their business. We’ve been successful
in the new home market as well, putting solar on a 300-home development
in Bakersfield, CA with Blu S.K.Y Developments and a 400-home Centex development
in Florida. And on the consumer side, we’re proud of sponsoring
the San Francisco Giants through a center field signage and stadium display
kiosk that helps communicate the benefits of solar to nearly 3 million
visitors per year.
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