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Written by Jennifer Kho

German solar manufacturer

SolarWorld AG

on Friday announced plans to open what it says is the largest solar-cell factory in North America.

The manufacturing plant in Hillsboro, Ore., is expected to have the capacity to produce 150 megawatts of cells by early next year -- bringing the company's total North American capacity to about 200 megawatts -- and to grow to 500 megawatts by 2011, the company said.

The company also is moving the headquarters for its U.S. operations, called

SolarWorld Industries America

, to Hillsboro from Camarillo, Calif., where it makes panels. SolarWorld bought the Oregon factory building -- a 480,000-square-foot facility measuring a quarter mile from end to end -- from Japan's

Komatsu Group

for $40 million last year and has invested a good chunk of change into growing and updating the facility.

In total, the company expects to invest more than $400 million in the manufacturing plant, which will take raw silicon through the entire process to produce solar panels: refining the silicon, growing crystalline ingots and turning them into wafers, cells and finally panels.

Founded in 1977, SolarWorld trades on the Frankfurt Stock Exchange under the ticker SWV. The move isn't the company's first foray into the United States. The company in 2006 bought

Royal Dutch Shell's


crystalline-solar-panel operations, becoming the country's largest solar-panel maker at the time.

At the

Solar Power International conference in San Diego

earlier this week,

Greentech Media

sat down with Boris Klebensberger, chief operating officer of SolarWorld and president of SolarWorld Industries America, to chat about its U.S. expansion, as well as the global regulatory, competitive and economic landscape.

Q: Why has SolarWorld decided the time is right to expand in the United States?


We had a good feeling about the U.S. market and believed in it. The U.S. is perfectly made for PV -- lots of land, lots of sunshine, perfect conditions.

Solar-power owners can earn more than twice as much as in Germany. And do you have enough energy in the U.S.? The answer is a clear "No." ... I'm not competitive today, I know, but the industry is aware and working on it, and the potential is there to outperform all other alternatives. It's a perfect fit for the U.S.

Q: Even with the passage of renewable-energy tax credits earlier this month, U.S. incentives aren't as generous as in Germany. Are you concerned about the ability to succeed in this regulatory environment?


That is one of the problems in America. There is something, but

the policy is not well-made. It is not like the feed-in tariff, which is very successful. We have to work on where the policy is and get people to the table. The time is right. ... Everybody realized over the last year that energy prices are an issue and that they probably won't go back to where they were. Will PV immediately

reduce prices? No, it will not. But we just need a commitment from all parties to get there. Nothing is free on this planet and Americans might have learned that the hard way over the last few weeks.

Q: Why are you so convinced that the feed-in tariff is the best solution for the United States?


If you look at it, you will easily see that the feed-in tariff -- the one Germany implemented -- is the most powerful law to easily implement taxes in an economical way. You're not paying upfront

which gives developers no incentive to maintain the system. You only get paid for what you produce. So you're going for quality because you want to have revenue for 20 years -- profit's always been an interesting driver for mankind -- and you will maintain it. The consumer pays, not the taxpayer, so if you consume more electricity, you pay more -- it's share-based. And it drives cost down.

Q: What about Spain? The feed-in tariff was so successful it spurred far more growth -- and cost far more -- than expected. The country set a 500-megawatt annual cap, which will be a decrease from the 1.2 gigawatts that Jenny Chase, a senior associate of New Energy Finance, said is likely to be installed there this year.


Spain's feed-in tariff was very successful but now, for the time being, they've put a cap on it. From my understanding, it's ridiculous. It will not see the same effect. You take some of the economic drivers out of the system because you cap it.

Q: Some U.S. manufacturers have turned to lower-cost countries for their factories. Why do you think it makes sense to build a factory in the United States?


It's funny. It took German companies coming here to give the U.S. the belief that it is possible to manufacture successfully in the U.S. A lot of my colleagues share that belief in the U.S. We did it in Germany, which is not low-wage, and showed that we were able to manufacture profitably there.

Q: Is that due to more emphasis on automation and less on human labor?


In countries like the U.S., automation plays an important role.

Q: Some analysts have predicted prices will fall as more solar equipment hits the market, making it more difficult to compete. What are you doing to try to stay competitive when that happens?


We try to be better. We're investing into technologies and more efficient processes. We do more or less what every industry has to do. We try to do our best. We have a technology roadmap...and clearly can see that we can meet our cost goals. But where will the price go? I have no idea. It's impossible to predict. We can see that PV will grow on a large scale -- lots of growth and lots of opportunities out there. We will try to be part of it and to increase our stake.

Q: Utilities have become eligible for the renewable-energy tax credits and some, like Southern California Edison, plan to build solar-power plants. According to Dow Jones' Clean Tech Insight, SCE told Suntech Power (STP) that the price it is willing to pay for panels is at least 20 percent below market prices. It already has a contract to buy some panels from First Solar (FSLR) - Get Free Report, which sells panels for $2.50 per watt, well below average prices. What does this mean for the industry?


SCE will probably buy a lot of cadmium. I would want to ensure First Solar can take it back because I wouldn't want to end up with a lot of cadmium in the future, which is worldwide forbidden. The world can't live on cadmium telluride. And I hope it will not, due to the toxicity of cadmium, if we can provide alternatives. There's definitely more crystalline-silicon manufacturing coming.

Q: Are you concerned about competition from thin-film manufacturers, if they can sell for so much less?


We don't feel the competition. For cell applications, there's enough room for all to get their fair share. I'm just pointing out it's not the sudden death of crystalline silicon. In the '80s, the market was 50-50 thin-film and crystalline, and crystalline's market share has increased every year to now 90 percent. Most people underestimate how difficult it is to make a good thin-film product.

Q: Why don't you think customers would favor thin films, if they are cheaper?


If customers have a choice between crystalline or thin-film, you can ask the question: What is the more reliable

product, and can you guarantee it for its lifetime? I can. I have products out there that are 30 years old and still working. I can prove it. How many people have thin-film panels that have been out there for 30 years and are still working? Reasonable research is advised.

Q: What do you think of concentrating solar?


Concentrating solar takes away one of the biggest advantages of PV in general -- no movement, no maintenance, so nothing can go wrong. There are applications for concentrators -- large systems in the desert -- but they require a lot of maintenance and are only applicable to some certain regions. There will be some applications where they will work very well, and the market's probably big enough for everybody to have a certain stake.

Q: You are one of the primary examples of a company that makes everything from the silicon to the panel. Meanwhile, a company like Q-Cells has been very successful in focusing on only one part of the supply chain, the solar cell. Why do you think your model is best?


Of course we acknowledge what Q-Cells did, and we helped them too. We were the first to give them wafers. We have a close historical link because we started at more or less the same time. As we say in German, there are different ways to row.

Q: Some manufacturers are getting into installation and financing to get access to more end customers. Are you?

(Don't miss "

Suntech Breaks Into Solar-Power Financing



Do I want to become a


? No, otherwise I would have started

as a bank. We are teaming up with other people to provide other services, of course, but I'm not a bank and don't want to be one.

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