Tax Credits for Renewable Energy Bode Well for U.S. Manufacturing

October 29, 2008

Mark Shortt
Editorial Director

All over the U.S., people are wondering aloud whether manufacturing that left our shores is now ready to come back. Factors like greater supply chain efficiency and intellectual property security, coupled with high shipping costs and the rising cost of labor overseas, have many believing that the pendulum may be swinging back in favor of manufacturing in the United States.

How this ultimately plays out remains to be seen, but there’s plenty of reason to be optimistic. Coupled with this is a golden opportunity to “take the bull by the horns” in another area. An excellent bet for rebuilding a strong manufacturing base in the states is to support the growth of emerging technologies targeted at high-growth areas like renewable energy (solar, wind, and geothermal power); fuel-efficient, hybrid, and all-electric vehicles; and cleantech sectors such as water desalination and purification. It’s an opportunity for America to become the leader in the manufacturing of parts and components necessary for renewable power-generating equipment and systems, as well as other systems that will be crucial to solving some of the planet’s biggest issues–such as clean water shortages–over the long term.

Many of the skilled workers formerly employed in industries that have lost jobs to overseas companies already have the skills required by a clean energy economy. These include sheet metal workers, welders, and machinists ready to ply their trade in an important growth industry.  And many of the domestic manufacturing plants formerly used for manufacturing parts that are now being outsourced overseas can be retooled for production of components needed in new energy technologies, like wind, solar, and geothermal.

As it turns out, American manufacturing for the wind power industry, in particular, has already gotten off to a pretty good start. On September 3, the American Wind Energy Association (AWEA) issued a statement announcing that U.S. wind industry installations had surpassed 20,000 megawatts (MW), achieving in two years what had previously taken more than two decades. According to AWEA, wind now provides 20,152 MW of electricity-generating capacity in the United States.  It is said to produce enough electricity to serve 5.3 million American homes or power a fleet of more than 1 million plug-in hybrid vehicles.

“Wind energy installations are well ahead of the curve for contributing 20% of the U.S. electric power supply by 2030 as envisioned by the U.S. Department of Energy,” said Randall Swisher, executive director of the American Wind Energy Association (AWEA), in the statement.

Earlier this year, AWEA reported an increase in the share of U.S.-made wind turbine components, from less than 30% to approximately 50% in three years. A big factor, AWEA said, was the “relatively stable availability” of the production tax credit (PTC) over the last three years. As a result, U.S.-based supply chain providers have been able to establish a much stronger foundation of domestic manufacturing for turbine components, ranging from towers and blades to gear boxes, bearings, and electrical and electronic components. AWEA estimated that, by the end of 2008, approximately half of the turbine components for turbines installed in the U.S. will be produced domestically. It also said that in 2007 and early 2008, at least 17 manufacturing facilities had been brought online or expanded in the U.S., creating more than 4,000 jobs and $500 million in manufacturing investment.

In August, a new market research report from BCC Research projected the domestic market for wind turbine components and systems to be worth $60.9 billion in 2013, up from $7.9 billion in 2007 and an estimated $11.2 billion in 2008. This growth potential hasn’t gone unnoticed outside the U.S., either, as evidenced by a recent Wall Street Journal report (September 12, Alexander Becker, B4) that Germany’s Siemens AG planned to increase its production of wind-turbine parts in the United States. Andreas Nauen, chief executive of Siemens’s wind power unit, reportedly told the Wall Street Journal’s Alexander Becker that Siemens plans to manufacture wind-turbine nacelles in the U.S., in addition to the rotor blades that it already produces at a plant in Iowa. “By boosting its manufacturing capacity,” Becker wrote, “Siemens is getting in gear for the expected long-term growth of the world-wide wind-power market.”

As Design-2-Part goes to press, the recently-adjourned U.S. Congress has taken a necessary step toward ensuring that renewable energy technologies continue to play a vital role in the expansion of U.S. manufacturing. Its passage, on October 3, 2008, of the Energy Improvement and Extension Act of 2008 extends the federal investment tax credits for businesses and individuals who invest in various forms of renewable energy. The new law, signed by the President the same day, also extends the production tax credits for facilities that generate energy from renewable sources. Both actions are expected to increase the market demand for American-made parts, components, and assemblies on the part of OEMs serving industries such as solar, wind, geothermal, and green building.

Renewal of the tax credits encourages further investment in renewable energy industries that have the potential to help solve our nation’s energy problems while providing meaningful jobs for thousands of workers. According to a report from AWEA earlier this year, expiration of the tax credits could have placed $19 billion in renewable energy investment and some 116,000 American jobs at risk. Let’s hope that the tax credits help to continue the momentum that’s been built toward strengthening America’s economy around a clean-energy manufacturing base.

For more information on AWEA, visit www.awea.org.

For more on BCC Research, or its report, “Wind Turbines: The U.S. Market (EGY058A),” visit www.bccresearch.com or contact the company at 866-285-7215.

¹Design-2-Part Magazine

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Growth Predicted for Process Spectroscopy Market

September 4, 2008

The value of the global market for process spectroscopy is projected to reach $1.2 billion in 2008, up from $945.9 million in 2006, according to a technical market research report from BCC Research, based in Wellesley, Mass. The value is expected to reach $1.9 billion by 2013, with a compound annual growth rate (CAGR) of 8.5 percent.

The worth of the equipment segment, which has the largest share of the market, is estimated at $957.8 million in 2008 and is expected to reach $1.4 billion in 2013, with a CAGR of 8.2 percent. The value of the applications segment, expected to be $282.6 million in 2008, should rise to $445.3 million in five years, with a CAGR of 9.5 percent.

Raman demand up

The demand for diode array and Raman scattering spectrometers is expected to grow rapidly between 2008 and 2013. The market for diode array spectrometers, which increasingly are being used in process spectroscopy, is projected to have a CAGR of 36.6 percent, and the market for Raman scattering spectrometers, a growth rate of 14 percent.

Published in May 2008, the report, “Process Spectroscopy: the Global Market” (IAS008C), is an update of the company’s 2005 report on the market (G-228R). It includes descriptions of process spectroscopy technologies, trends and forecasts for their growth over the next five years, and of discussions on anticipated innovations and new applications. Regulatory factors as they apply to applications are examined, and company profiles, including information on mergers or acquisitions, are included.

The analysis across the process spectroscopy market is based partly on reported revenue dollars and units as reported to the US Securities and Exchange Commission and/or other governmental agencies, as well as on previous process spectroscopy reports and on data gathered from various sources, including US Patent and Trademark Office databases. ¹

¹Caren B. Les; Photonics.com

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Photovoltaics drive thin-film market for energy applications

September 3, 2008

Wellesley, Mass. — The global market for thin films in energy applications is projected to reach $3.9 billion in 2013 up from $1.1 billion in 2007 for a compound annual growth rate (CAGR) of 23.5%, according to BCC Research.

The new technical market research report, The Global Market for Thin Films in Energy Applications, divides the market into application segments for photovoltaics, concentrating solar power, geothermal energy, nuclear energy, batteries and fuel cells. Of these, the photovoltaics segment holds the largest share of the market, with $916.4 million in revenues in 2007. This is slated to increase to $1.2 billion in 2008 and over $3.3 billion in 2013, for a CAGR of 23.6%.

Thin films for fuel-cell applications are the second largest segment, with sales exceeding $82.0 million in 2007. Sales are expected to increase to $98.7 million in 2008 and $301.0 million in 2013, for a CAGR of 25.0%.

Thin films for batteries consume the third largest share of the market, worth $36.0 million in 2007 and an estimated $39.2 million in 2008. This segment should reach over $98.0 million in 2013, for a CAGR of 20.1%. This segment is followed by applications in nuclear energy, which are expected to see the slowest growth of any segment. Revenues in 2007 exceeded $25.0 million and are expected to increase only slightly in 2008. This segment is projected to reach $33.1 million in 2013 for a CAGR of 5.0%.

Concentrating solar power applications are expected to see the most robust growth of any segment. Sales for thin films in this segment generated $14.7 million in 2007 and an estimated $23.4 million in 2008. This is expected to reach $93.0 million in 2013 for a CAGR of 31.8%.

Thin films for geothermal applications hold the smallest share of the market, worth $2.7 million in 2007. This is expected to increase to $3.0 million in 2008 and $5.3 million in 2013, for a CAGR of over 12.0%.¹

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¹Gina Roos; EETimes

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Air compression energy storage finally finds an investor

September 2, 2008

An idea that has long been batted around by entrepreneurs and venture capitalists is finally getting its day in (or, more accurately, out of) the sun: pumping air into pressurized air cave systems. Then, the air is let out, and it spins turbines to generate electricity.

The method is used when it is not gusty enough topside for regular wind generation to work.

PSEG Energy Holdings will provide around $20 million to Energy Storage and Power, a joint venture between itself and energy storage expert Michael Nakhamkin, according to the AP. The company will work on marketing the technology to wind generators, primarily using natural caves once occupied by gas or oil.

The air is compressed in the caves by using electricity from wind turbines (which, by the way, aren’t the same turbines that the cave air spins).

Cave storage should prove useful in many of the same areas that wind turbines will be going up. In Texas, for example, where oil tycoon T. Boone Pickens is investing billions in wind, many of the same oil reservoirs he helped to empty will be available.

However, it should also be pointed out that this is one idea that has been floating about for several years — and never got a venture investment, as far as I’m aware (PSEG is a large holding company). There are likely numerous reasons for that. Caves that stored fossil fuels for millions of years can still spring leaks, for one, and they may or may not be of a useful size. Also, the air in the caves can’t provide an immediate substitute source of power if the wind dies down, mainly being used during longer windless periods.

And it’s not a totally clean solution; a natural gas turbine needs to be paired with the storage method, to heat the air (thus making it expand). Finally, energy is lost in all stages of the process, which translates into making the wind turbines working to store air less efficient.

Still, the prospects for any storage technology look pretty good right now. And that has everything to do with the scale of new demand for it: According to a new study released this morning by BCC Research, the US market for wind systems will be worth $60.9 billion in 2013, up from $11.2 billion this year.¹

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¹Chris Morrison; Venture Beat

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Global Market Trend for Thin Films in Energy Applications

August 26, 2008

According to a new technical market research report, THE GLOBAL MARKET FOR THIN FILMS IN ENERGY APPLICATIONS (EGY060A) from BCC Research, the global market for thin films in energy applications was worth $1.1 billion in 2007. This is expected to increase to $1.4 billion in 2008 and $3.9 billion in 2013, for a compound annual growth rate (CAGR) of 23.5%.

The market is divided into application segments for photovoltaics, concentrating solar power, geothermal energy, nuclear energy, batteries and fuel cells. Of these, the photovoltaics segment has the largest share of the market, with $916.4 million in revenues in 2007. This is slated to increase to $1.2 billion in 2008 and over $3.3 billion in 2013, a CAGR of 23.6%.

Thin films for fuel cell applications are the second largest segment, with sales exceeding $82.0 million in 2007. This should increase to $98.7 million in 2008 and $301.0 million in 2013, for a CAGR of 25.0%.

Thin films for batteries have the third largest share of the market, worth $36.0 million in 2007 and an estimated $39.2 million in 2008. This segment should reach over $98.0 million in 2013, for a CAGR of 20.1%.

Applications in nuclear energy are expected to see the slowest growth of any segment. Revenues in 2007 exceeded $25.0 million and are expected to increase only slightly in 2008. This segment should reach $33.1 million in 2013 for a CAGR of 5.0%.

Concentrating solar power applications are expected to see the most robust growth of any segment. Sales for thin films in this segment generated $14.7 million in 2007 and an estimated $23.4 million in 2008. This is expected to reach $93.0 million in 2013 for a CAGR of 31.8%.

Thin films for geothermal applications have the smallest share of the market, worth $2.7 million in 2007. This is expected to increase to $3.0 million in 2008 and $5.3 million in 2013, a CAGR of over 12.0%.

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Global Printed Electronics Worth $8.8B by 2013

July 18, 2008

The market includes optoelectronics, radio frequency, energy, sensors and other applications. Optoelectronics applications dominate the market with a share of more than 85% in 2007 and 2008, but will decline to 69% in 2013.¹

¹Chelsey Drysdale; CircuitWorks.com

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Solar Power’s New Style

June 13, 2008

Mike Gering, CEO of the start-up Global Solar, picks his way along his factory floor, tracing the convoluted path that his thin-film solar panels follow from birth to shipping truck. The raw materials the workers carry are ultra-thin sheets of flexible plastic, which are then coated with a series of chemicals–indium, gallium, diselenide–that allows the module to turn sunlight into electricity.¹

¹Bryan Walsh, Time Magazine.

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