1. Building an AZ solar supply
chain and industrial cluster
Glenn Hoetker
Anthony Evans

2. Our mission
More investment in solar energy
production and supply chain
capacity is attracted to Arizona
as a result of tighter linkages
within the cluster. These
linkages extend among the value
chains, the talent development
systems, the research base,
investors, and public policies.

3. Our approach
• Identify the characteristics of a
successful industrial cluster
• Identify factors inherent in robust
supply chain development
• Identify core clusters and their supply
chains
• Identify critical gaps
• Recommend steps to close gaps and
key players to engage
• Identify new directions to further build
cluster capability
• Set milestones and fill gaps in
collaboration

4. Membership
Bud Annan, Arizona State University
Fred Buss, Town of Gila Bend
Bennett Curry, Arizona Commerce
Authority
Anthony Evans, Arizona State
University
Glenn Hoetker, Arizona State University
Michael Neary, AriSEIA
Ron Vokoun, Mortenson Construction

5. Utility scale
Paloma plant (First Solar,
17 MW PV)
Cotton Center (Solon, 17
MW PV)
Solana (Abengoa, 280
MW Concentrating solar)

6. Distributed generation
ASU Solar Parasol
(Strategic Solar
Energy/NRG Solar, 2.5
MW PV)

7. Partners and stakeholders

8. AZ solar industry - snapshot
• 300-400 AZ firms easily meet
current in-state demand
• Range of solar technologies
– Photovoltaic (PV)
– Concentrated Solar Power (CSP)
– Solar Heating & Cooling (SHC)
• Technology-specific supply chains

9. Photovoltaic supply chain
(pre-construction/installation)
RAW WAFER SOLAR SOLAR SOLAR
INGOT
MATERIAL MFG CELLS MODULE PANEL
• U.S. largest polysilicon producer in 2008 (43%) but China,
Taiwan and South Korea are now the key players
• Limited U.S. wafer manufacturing facilities
– Hemlock and MEMC
• North America = 7.4% of global cell production capacity (2010)
• North America = 8.7% of global module production (2009)

10. CSP supply chain
(pre-construction/installation)
• Greater opportunities for localized
manufacturing
• Components cut across technologies
– Mirrors, reflectors, collector
structures, heat transfer fluids, salts,
turbines, steel etc.
• 18 CSP U.S. mfg facilities in 2009
• Solana’s U.S. supply chain = 29
companies in 22 states ($730 million)
– 23% invested in AZ

11. AZ solar-related employment
• Solar Foundation (2011) 4,786 solar
jobs at 900 AZ establishments
– 3rd largest state for solar jobs
• BLS suggest 49,717 jobs across all green
goods and services (GGS)
– 23rd largest state for GGS jobs
• SEIA survey still in progress
• Seidman survey: 5,500-7,400 solar jobs
• 0.2-0.3% of AZ’s non-seasonally
adjusted non-farm employment

12. AZ solar-related employment
Employment Opportunities by Sector
383
814
8%
17%
Manufacturing
1292 Installation
27%
R&D
Sales
1723 Other
574 36%
12%
Source: Solar Foundation (2011)

13. AZ competitive advantages
• Solar insolation
• Proximity to California
• Land/resource availability
• Streamlined zoning and permitting
• Solar construction know-how
• On the job learning and innovation
• University research community
• Workforce supply

14. Cluster potential
• Viable solar cluster drives economic growth:
– Project employment and input impacts
– Attracts new downstream local suppliers
– Encourages certification
– Firms can export know-how out-of-state
• Limited potential for solar PV manufacturing
• Greater supply chain opportunities for other
solar technologies
• Construction sector could be a real winner

15. Supply chain cluster example
• Construction = biggest benefactor
• Supply of steel, concrete, mirrors,
nuts, bolts and electrical supplies
• Short-term employment impacts:
– Utility-scale plants = 1000+ jobs
– Commercial DG = 50-100 jobs
– Residential DG = 1-2 jobs
• Key: convert the jobs into job years

16. Challenges and barriers
• Utilities have almost met RPS targets
• Energy demand increases >1% each year
• Positive construction impacts will dry up
• Residential taxes and incentives are on a per
household basis, not per system installed
• New AZ homes still built without solar ready
ordinances
• Availability of capital investment
• Lack of optimism within the local industry
• Potential migration to states with opportunities

17. Cluster solution 1:
Export Strategy
• Effective export strategy essential
• Principal target: California
• Significant job creation
opportunities
• Galvanize inter-state dialogue to
resolve transmission barriers

18. Cluster solution 2:
R&D
• AZ solar R&D center
• Close co-operation between education,
utilities, public and private sector
• CA ahead for solar training and courses
• But AZ is starting to catch up:
– First Solar/City of Phx/ASU’s new solar
engineering & commercialization
certification
– ASU’s new PSM (first in U.S.)