As announcements go, the selection of Japanese solar panel manufacturer Solar Frontier to supply solar modules for a new, highly energy efficient building on the SUNY Polytechnic Institute campus in Albany barely caused a stir on Wednesday.
But state officials said the announcement was far more than a supply agreement for a new building. They hailed the agreement as a key step in building a relationship between the state and Solar Frontier that ultimately could lead to the opening of a second, major solar panel factory in Buffalo.
While an agreement to build a solar panel factory in Buffalo is likely months away – and more milestones need to be reached – state officials said putting Solar Frontier’s panels on the Zero Energy Nanotechnology building is an important step in demonstrating the feasibility and market potential of the company’s modules in the U.S. market.
“It’s anchoring them basically, to say, we will work with you on doing the demonstrations and showcasing your technology as one of the phases of the partnership to locating them in Buffalo,” said Alain Kaloyeros, SUNY Polytechnic’s chief executive officer, and a key player in Gov. Andrew M. Cuomo’s Buffalo Billion initiative to make Buffalo a global center for clean energy.
Solar Frontier, one of the world’s leading manufacturers of solar panels, signed an agreement in April with state officials to explore the possibility of the manufacturer opening a solar module factory in Buffalo, while also setting up the company’s North American headquarters at the SUNY Polytechnic campus in Albany.
If the state is successful in landing Solar Frontier, it would make the Buffalo Niagara region a leading site for solar panel production. SolarCity, the nation’s biggest installer of residential solar energy systems, currently is building one of the world’s biggest solar panel factories at the RiverBend complex in South Buffalo, with the potential for 2,900 new jobs at the factory and its suppliers after it reaches full production in 2017.
“It’s an essential step toward cementing the relationship and the location of manufacturing in Buffalo,” Kaloyeros said. “It’s an essential step in building the critical mass of green energy and the information hub and making Buffalo the world’s capital in green energy.”
“Between SolarCity and Solar Frontier, you’re basically locking in the top two global corporations in this business, both of them in Buffalo,” Kaloyeros said.
The exact size of Solar Frontier’s proposed plant has never been disclosed, although Pradeep Haldar, the SUNY Polytechnic vice president who is spearheading the negotiations with Solar Frontier, said in April that it could have the capacity to produce enough panels annually to generate several hundred megawatts of electricity.
At that time, the two sides said that if a deal was struck, Solar Frontier could create as many as 250 research, development and manufacturing jobs in the state, with a total investment, including payroll, that approaches $678 million over seven years.
Kaloyeros said Wednesday that Solar Frontier has since expanded its thoughts on a possible Buffalo factory, which now could be “many times” bigger than originally contemplated.
“It’s an essential step toward cementing the relationship and the location of manufacturing in Buffalo. It’s an essential step in building the critical mass of green energy and the information hub and making Buffalo the world’s capital in green energy. Between SolarCity and Solar Frontier, you’re basically locking in the top two global corporations in this business, both of them in Buffalo.”
State officials have described Solar Frontier’s collaboration with the nanoscience college as an important part of the company’s interest in setting up production facilities outside Japan, where it currently produces all of its modules at three factories with a combined annual production capacity of almost 1,000 megawatts. An additional factory with 150 megawatts of annual capacity is scheduled to open in Japan early next year.
Under the April agreement, the state and Solar Frontier established a three-phase program to evaluate the potential for the company expanding in New York. With the first phase, an initial feasibility study and demonstration project, now cleared, the focus is on a more extensive examination of the business and financial viability of a New York expansion.
That phase is expected to take a few more weeks to complete, and if it is successful, would lead to a third phase that would involve negotiating a deal to build a factory in Buffalo.
“We are working with Solar Frontier and trying to anchor them to set up a manufacturing operation in Buffalo,” Haldar said.
Solar Frontier specializes in CIS thin-film solar panels. Those panels use glass, instead of a traditional silicon base. The company has said its panels can top 21 percent in efficiency, which is better than most conventional solar modules. Most thin-film solar panels are made with expensive high-end glass, but Solar Frontier’s technology can use normal glass, which costs only about a tenth as much.
“They have some new technologies based on thin-film and one of the key things is doing some demonstrations in New York and other parts of the U.S. as well, to show that their technology, from a deployment standpoint, can perform and do better than some of the existing technologies that are out there,” Haldar said.
“We can use that as a tool to do the demonstration and prove to them that there is, in fact, a demand for their product in the U.S. and that having a factory in Buffalo would serve them well,” Haldar said. “It’s just one step in a series of them to attract them to come here.”
One of those steps is cementing a relationship between Solar Frontier and SUNY Polytechnic for research and development work. Kaloyeros said that relationship would not only help Solar Frontier develop better, more efficient and less costly solar panels, but it also would help ensure that a Buffalo factory would continue to have cutting-edge competitive products to produce.
“The governor doesn’t want a pure R&D relationship. It doesn’t make sense for us,” Kaloyeros said. “The R&D relationship and the demonstration are kind of like setting up the foundation for establishing manufacturing in Buffalo.”
“We’re trying to understand what their needs are for the future so that we can leverage a lot of the capability we already have in Albany to tell them that we can help them for their next generation technologies that they hopefully will manufacture in Buffalo,” Haldar said. “That would be an added value to them.”
Solar Frontier is a subsidiary of Showa Shell Sekiyu, a publicly traded company based in Tokyo that also has extensive oil refining operations. Global energy giant Royal Dutch Shell owns a third of Showa Shell Sekiyu, and Saudi Aramco holds a 15 percent stake in the company. Showa Shell Sekiyu ranks 436th on Fortune magazine’s list of the 500 biggest global corporations, with annual revenues of $27 billion.