Sales cited as obstacle to solar development in Nevada

OCI Solar Power of South Korea would love to manufacture solar-cell components in Nevada.

China-based cell-maker JA Solar is eyeing the Nevada market as well.

So why aren't they already here?

The biggest obstacle is a lack of large-scale, steady business, company representatives said Monday at a manufacturing panel during the Global Solar Summit at M Resort.

Sure, taxes, workforce and land prices help. But the lowest taxes, cheapest land and best labor pool on the planet won't make up for too few sales.

The problem is the way solar development happens, said Nick Bullinger, chief operating officer of OCI Solar Power.

Manufacturers need predictable sales contracts for the first few years of production. Right now, requests for proposals to meet renewable portfolio standards trickle onto the market in small amounts of 20 megawatts to 100 megawatts at a time, Bullinger said.

So even though a portfolio standard might be large -- Nevada's requires the state to get 25 percent of its power from renewables by 2025 -- contract commitments are "incremental" and not big or consistent enough to draw manufacturers.

The problem is nationwide: There's no national portfolio standard. Every state has its own standard, and some states have no requirement at all.

Jonathan Pickering, president of JA Solar's Americas region, agreed, noting that his company needs long-term contracts from developers to buy cells from its factories.

Asked after the panel what level of business would bring JA Solar to Nevada, Pickering said the company would build a plant here if it could be guaranteed 100 megawatts in annual sales for five years.

"Development agencies, and not just in Nevada, focus so much on tax breaks and land costs. But if you're a manufacturer, the most important thing you need is someone to buy your product," Pickering said. "You need a long-term commitment. Not a six-month commitment, but a five- or 10-year commitment."

Stacey Crowley, director of the Nevada State Office of Energy, said the solar sector isn't in a position to offer that kind of steady business.

"Any business would like to have a steady stream of large projects, but this industry is maturing. Here in Nevada, we have a flat load (power consumption), and we have to balance renewables with costs for ratepayers," Crowley said.

"It's an issue elsewhere, too. We're going to continue to see smaller projects. And smaller projects in some ways provide a more sustainable approach to business than very large projects do."

Nor is it safe for the state's power supply to focus on bigger projects, said Bobby Hollis, executive of renewable energy with NV Energy.

Southern Nevada's peak power load is 5,500 megawatts. To build 300- or 500-megawatt projects that place a chunk of power production in one solar plant could cause supply problems if a cloud shuts down the plant.

Besides, California is turning toward smaller projects, and Arizona has long emphasized smaller projects.

"There's some truth to what they're saying -- that if you have a large pipeline and a lot of demand, there's a greater chance that they'll locate near where the demand is," Hollis said. "That said, Arizona has had a lot of success having manufacturers come in, and Colorado is now getting some manufacturers. I'm not sure a guaranteed pipeline is the answer."

Crowley said part of the answer to consistency could come through state policies, such as a streamlined regulatory process. She said state leaders are working on that kind of assistance.

Bullinger suggested another model: A solar developer could act as an "orchestrator" that tracks the amount of green electricity local utilities must buy, establishes a reasonable power price and uses negotiating clout to lure manufacturers here in exchange for long-term equipment-buying contracts. That kind of deal could draw OCI here, he said.

Pickering cited San Antonio as a model. The city-owned power company issued a request for proposals for 50 megawatts of solar power in January, but just reissued the request and upped the size to 400 megawatts -- a scale that makes the area far more attractive to manufacturers, Pickering said.

Contact reporter Jennifer Robison at jrobison@ reviewjournal.com or 702-380-4512.