How the Philippines Can Be a Solar Power

With SunPower and Solaria already operating solar manufacturing plants here, the Philippines could become a profitable "Solar Valley"

The solar power industry these days is a mix of large and small companies pushing their own technologies. The playing field is still wide open for competing solar panel technologies. Eventually, the market will decide which ones will be left standing and which ones will eat the dust.

With all this competition, are there still opportunities for developing countries like the Philippines? Yes, particularly in manufacturing and in the downstream and applications areas of the value chain. The Philippines semiconductor and electronics industry, working closely with local universities, industries, and investors, can offer significant opportunities for innovation, particularly in solar energy applications development and manufacturing-process reengineering and optimization.

Let's start the argument with the fact that SunPower (SPWR) is operating two solar manufacturing facilities here. A company spokesperson confirms that its exports from the Philippines totaled $220 million in 2006. SunPower will be building a 250-megawatt solar plant alongside a 550MW plant built by OptiSolar, a California-based thin-film photovoltaic manufacturer. Taken together, these two plants will form the world's largest solar power plant rated at 800MW for Pacific Gas & Electric in California's San Luis Obispo County.

Driving Down Costs

SunPower's crystalline silicon photovoltaic (PV) fab process in the Philippines is its most efficient, with a 22% light-to-electricity conversion ratio. With the help of its Filipino engineers, SunPower has managed to drive down costs and improve manufacturing yields significantly. It also expects to reduce system installation costs by half in 2012 from 2006 prices. The company does not expect to be affected by a worldwide crunch in silicon availability, as it has supply contracts up to 2010, when the crunch is expected to ease.

The wafers supplied to SunPower are cut from silicon ingots by its joint venture with local Lopez Group's First Philippine Solar. The joint venture is based near the SunPower factory a few miles south of Manila and has been operating since June 2008.

A privately held Silicon Valley-based company, Solaria, is also manufacturing solar panels here. According to a company spokesperson, Solaria is operating locally through contract manufacturer Ionics EMS. In an e-mail message, Solaria Chief Operating Officer Alelie Funcell says the company selected the Philippines because of its "highly educated labor pool and strong electronics industry infrastructure, specifically in back-end assembly." Another plus, she says, is the ability to leverage the large number of engineers and manufacturing personnel experienced in the semiconductor sector. Funcell, a 30-year industry veteran, adds that the solar industry supply chain in Southeast Asia is already well laid out, another reason Solaria chose to locate in this part of the world.

According to Solaria's Funcell, Filipino engineers have made improvements in solar cell manufacturing processes, such as cell interconnect soldering, electrical testing and analysis of solar cells and panels, material analysis and quality control, material handling, and automation. Filipinos can use the presence of companies like SunPower and Solaria, she says, to attract their key suppliers. "In order to replicate that success for the solar industry and create an efficient 'local Solar Valley,' the Philippines would need a solid infrastructure with an ecosystem of supply-chain support," says Funcell.