Monday, October 13, 2008

Building the Philippine Solar Valley



For the last three articles of this column, I have talked about the solar energy sector and what is happening around the world in solar.

I would like to add that the high initial cost can, of course, be depreciated over a period of years.

So now, let me give you my opinion of how we can build a Philippine Solar Valley and why we should.

First of all, why should we?

The answer is simple. The growth of renewable energy will be explosive over the next few years.

This is not a mature industry characterized by slow and steady growth over the next few years. No, this will be a very explosive high growth industry.

There are many companies and technologies vying to gain market share, and with plans like Barack Obama’s plan to spend $150 billion on renewable energy, this is bound to create a lot of new technologies and startups.

Granted that it will create new industries in the US, there will still be cost pressures.

We can attract many of those solar startups to setup their manufacturing here, and leverage our three decade experience in the semiconductor and electronics industry to improve the manufacturing of these products.

Our own technology suppliers here should be spun off and capitalized, to become suppliers to these foreign companies. This is how a lot of Silicon Valley like ecosystems began: by first becoming suppliers to big companies.

How do we do that?

We need to set up a Solar Energy R&D Institute somewhere near where Sunpower (and hopefully Solaria) is located. By clustering the solar manufacturing companies in one area, we are able to gain a critical mass of solar energy practitioners.

The Solar Energy R&D institute should be a semi-government, semi-private R&D institute that can spin off its intellectual property so that investors and technopreneurs can commercialize these technologies.

Technology startups can range from systems integrators, components manufacturers, equipment manufacturers, consulting firms, and even venture capital and intellectual property law firms.

The key is to superconcentrate them in one area, using the big solar companies as a guide where to locate it, so that the engineers, scientists, venture capitalists, technopreneurs eat, breathe, talk, swim in solar.

But to get this started, engineers and scientists have to start experimenting with solar panels. This is where donations by companies like Sunpower and Solaria become important. We need to train engineers in large numbers for the solar energy sector.

This is basically hedging our bet for this sunrise industry that is coming our way. Once these technologists develop prototypes from the solar panels that are either lent or given to them, they can seek investors for their prototypes, creating new tech startups.

Just to drive home the point, the Ateneo de Manila Innovation Center developed a solar powered way to get 16 liters of high purity potable water from the air, using a converted dehumidifier connected to a solar panel.

They also have other experiments and designs that are being built.

And all this was enabled because of the solar panels that were given to them.

Aside from encouraging donations to hobbyists, engineers, scientists, there should be more solar power plants set up. Aside from the Cagayan Electric Power and Light Company, Inc. in Cagayan de Oro, as well as the Palawan and Aurora solar power plants, more power plants should be built.

Hopefully, the Renewable Energy Bill will be approved with its incentives, including tax breaks and credits, renewable portfolio standards, feed-in-tariffs, and other incentives intact.

Having a Solar Valley here will put the Philippines on the map as a center of excellence for high technology manufacturing in solar energy.

It will create new jobs and new opportunities for us if we prepare for it.

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