Oregon’s existing semiconductor industry is a natural fit for solar photovoltaic manufacturers that require similar skills among their high-tech workers and supply chain network. In addition, Oregon’s public policies and incentives, along with the “green” ethic of its residents, have proven a solid platform for the deployment of solar PV and thermal technologies throughout the state.

Industry Overview

The Solar Energy Cluster in Oregon includes a broad range of companies across the supply chain including the manufacturers of solar photovoltaic (PV) panels, thin film PV, inverters, hot water heaters (solar thermal) and their components; the distributors of electrical and plumbing supplies; installers for commercial and residential systems; utilities and developers; and service providers in the software, legal, financial and insurance sectors.

The solar energy industry continues to be one of the fastest growing in the world. In 2009, while most industries contracted, solar photovoltaic installations grew 37% year-to-year and solar hot water systems increased by a solid 10 percent. At the same time, venture capital investment in solar energy outpaced all other “clean technologies” for the 5th year in a row garnering nearly 29% of the $4.85 billion portfolio.

Since 2007, over 1,000 new jobs have been created in the solar manufacturing sector alone, and this figure is expected to double by 2012. Hundreds of new jobs have also been added throughout the solar value chain including professional service providers, operations and maintenance suppliers, and commercial and residential system installers.

Solar by the Numbers

Sector

Solar

Economic  Impact

Average Wage: $59,149 (2006)
Cluster Employment: 27,893 (2006)
Average Wage Growth: 9.62% (2003-2006)
Cluster Employment Growth: 8.12% (2003-2006)

Sources: BLS, QCEW data based on cluster definition from 2005 Cogan Owens Cogan report for OECDD. NAICS codes used are available upon request.

Cluster Strengths

  • Strong Manufacturing Base – The breadth and depth of manufacturing companies provides critical mass with which to attract and retain additional firms throughout the value chain.
  • Diverse Constituency – In addition to manufacturers and their suppliers, the Solar Energy Cluster has dozens of PV and thermal systems installers – from sole proprietors to companies that operate on a national scale – as well as professional service firms that offer customized solutions for the solar industry.
  • Energy Industry Hub – The presence of the BPA, two investor-owned utilities, Energy Trust of Oregon, and R&D organizations, such as NREL and Oregon BEST offer a huge competitive advantage for the advancement of the Solar Energy Cluster.

Cluster Challenges

  • Financing – The Solar Energy Cluster has enjoyed a rapid growth curve; however, it continues to rely on public investment to compete effectively with traditional, fossil-fuel based technologies. State budget cuts pose a significant risk to advancing this cluster and achieving Oregon’s economic development and climate change goals. Without a firm foundation of public investment in the solar energy cluster, Oregon offers little to no competitive advantage to the private sector companies attracted to the state, and is at at risk of losing many of them to other regions of the country where their businesses can continue to thrive. In fact, Oregon has already lost ground due to the recent changes to the BETC program. Commercial energy projects have remained relatively flat compared to 2009, and many planned installations have stalled while investors wait to see the outcome of the 2011 legislative session. In the meantime, much of the project activity and resources have moved to states such as California, New Jersey, Hawaii and Colorado.
  • Workforce – There is an ongoing need for skilled labor from high-speed process automation technicians to journeyman electricians and plumbers. In addition, the service-related companies seek professionals in finance, law, and project development that also have expertise in the energy sector.
  • Permitting – In both the manufacturing and energy deployment sectors, there are opportunities to improve the permitting process. Though the state has worked hard to streamline it, the permitting process for manufacturing operations is often difficult to navigate, requiring a significant amount of time and money without offering much added value. Companies that operate in multiple jurisdictions are also faced with inconsistent requirements and fees.

    Top Priorities

    The Solar Energy Cluster is still in its formative stage and requires public support – be it access to low-cost capital, incentive programs and/or grants – to offset the above market cost of clean technologies relative to the well-established and artificially low cost fossil-fuel based technologies. Adequate financing tools are needed throughout the supply chain. The manufacturers rely on state programs such as the BETC and SIP to reduce their capital investments in property plant and equipment. Energy developers similarly leverage the BETC and property tax exemptions to achieve an acceptable return on investment that is necessary for a solar project to move forward. Likewise, installers utilize the BETC and the RETC to tip the scale of affordability on commercial and residential distributed generation.

    The Solar Energy Cluster’s #1 initiative is to guarantee continued financial support of clean technology manufacturing and deployment throughout the state. Since 2007 – just a few short years ago – Oregon propelled itself to the forefront as a national leader in renewable energy by establishing a strong RPS and increasing the BETC for renewable energy technologies. As a result, over 1000 new jobs were created in the manufacturing supply chain alone, and hundreds more in energy deployment. While Oregon’s unemployment level consistently exceeds the national average, the solar energy cluster has expanded. Moreover, a significant number of job opportunities cater to both the manufacturing and construction industries, both of which have suffered greatly during this economic recession.

    Industry Associations

    Oregon’s solar energy industry has enjoyed a long tradition among the renewable energy technologies in Oregon. Oregon Solar Energy Industries Association (OSEIA), the state’s trade group exclusively focused on the solar energy cluster, was established nearly 30 years ago in 1981. Up until recently, OSEIA was largely composed of residential and commercial installers throughout the state. Since 2007, however, the make-up of the group has evolved due to the influx of solar manufacturers.

    OSEIA holds its annual meeting in January, and it also hosts the NW Solar Expo – the largest solar expo and conference in the Pacific NW –typically in April of each year. In addition, periodic events are hosted throughout the year in regions around the state.

    Participating Organizations

    The cluster participants cover a broad spectrum of roles from mid-to-upper level managers of large international manufacturers and national installers to policy and operations staff of mid-sized companies to sole proprietors deploying residential systems in their local communities.  The cluster includes PV manufacturers, distributors, commercial and residential installers, professional service providers, utilities, and public and non-profit advocates.

    Notable traded-sector companies include SolarWorld, PV Powered Inc., Platt, Sanyo Energy Corporation, Solaicx, REC Solar, and Solar City.

    Cluster Contact

    Glenn Montgomery
    Executive Director
    Oregon Solar Energy Industries Association
    503.853.5804