Schott Solar’s photovoltaic panel business crashed and burned, but the solar manufacturing industry in New Mexico is still very much alive, and doing well.
That’s because, unlike Schott, most local producers are not making solar panels. Rather, they’re building other components for solar installations, such as mounting platforms and solar-tracking systems, which are in high demand, according to industry leaders.
In the solar panel arena, a market glut, low demand in recession-strapped Europe and a flood of cheap Asian imports are driving prices down and creating intense competition among manufacturers. That’s pushed many big players into bankruptcy, and it’s what forced Schott to close its 200,000-square-foot panel factory in Albuquerque this summer.
In contrast, New Mexico’s solar-component manufacturers say business is booming.
“The solar industry has gotten a bad rap that companies are going bankrupt everywhere, but that’s just not justified,” said Peter Lorenz, president and CEO of Unirac Inc. in Albuquerque. “We’ve engineered products and space in different segments of the industry. That provides buffers against ups and downs in other market segments, such as solar panels.”
Mounting biz booming
Unirac makes mounting platforms for solar systems at an 80,000-square-foot factory at the Springer Industrial Park on Broadway NE near Downtown.
The company is increasing its workforce this year from 130 to 150. It signed a new lease on Sept. 1 for a second, 40,000-square-foot building at Springer Park.
Lorenz declined to disclose revenue, but he said Unirac is on track for 80 percent growth this year. That’s on top of a 100 percent increase in revenue between 2009 and 2011.
Another Albuquerque company, Array Technologies Inc., says it’s cornered nearly one-third of the entire domestic U.S. market this year for solar trackers, which are used to tilt and turn solar panels to follow the sun, increasing electric output from photovoltaic systems.
Array, which builds the trackers at a 50,000-square-foot factory in the Interstate 25 and Jefferson NE industrial zone, expects to have sold 1 gigawatt of component capacity by December for solar PV systems installed throughout the U.S. in 2012. That represents about 31 percent of the 3.2 gigawatts of solar photovoltaics that the national Solar Energy Industry Association projects will be built this year.
“It’s a real milestone,” said Array President and CEO Ron Corio. “We’re considering building another warehouse and light manufacturing facility west of New Mexico. We could also expand our existing facility here.”
This is Array’s third year of accelerated growth. The company stopped publicly disclosing revenue after sales jumped from $10 million in 2009 to $38 million in 2010. But Corio said his firm installed 380 megawatts of tracking systems in 2011, up 280 percent from 2010.
Two other companies also report stellar growth.
Sacred Power Corp., which makes fully assembled solar systems for remote homes and buildings, says 2012 is shaping up as its best year since launching in 2001. The company, which runs a 47,000-square-foot factory at the Sawmill industrial Hub Zone near Downtown, projects $10 million in revenue by December, up from $7.5 million in 2011.
“We’re on a strong growth curve,” said Chief Operating Officer Odes Armijo-Caster. “We’ve installed more solar capacity this year than any other year.”
Direct Power & Water Corp., which designs and manufactures racks and other components for solar systems at a 30,000-square-foot factory at Vassar NE, has leased another 3,000-square-foot space across the street for storage, and to accommodate its growing sales and customer-support teams, said Vice President of Business Development Kevin Goodreau.
Preformed Line Products Co. of Ohio acquired DPW in 2007 after it reached $8 million in revenue. The company hasn’t disclosed income since then, but Goodreau said sales are growing.
“Markets are strong in New Mexico, and in a number of states that we serve, such as Hawaii, Florida and California,” Goodreau said.
Driving the market
New Mexico’s bustling manufacturing activity is fueled by huge growth this year in solar installations nationwide.
A surge in utility-scale projects — which power thousands of homes and businesses — is the principal growth driver this year. SEIA projects utility-scale solar will account for 54 percent of installations in 2012, up from 40 percent in 2011.
Renewable energy mandates in many states, plus federal tax credits for clean energy development, also are fueling demand. But the big driver is a sharp drop in prices for solar panels and installations.
“The No. 1 factor is the lower cost for systems,” Corio said. “The price of these (utility-scale) projects is now one third of what it was five years ago.”
Two other companies are also establishing operations in Albuquerque.
P4Q USA Inc., a Spanish electronics manufacturer, plans to locate its North American headquarters here. It will make solar tracking controllers and other electronic devices at a 9,000-square-foot plant in the Jefferson and I 25 industrial zone.
Green-building firm McCune Works Inc. plans to lease the Schott factory in south Albuquerque to restart solar panel operations early next year.
Nationwide, solar developers installed 1.254 gigawatts of solar capacity in the first half of 2012, more than double the amount installed in the same period last year, according to the latest report from the Solar Energy Industry Association, released in September. The study projects 3.2 gigawatts of installations by year-end, or 71 percent more than in 2012.
Industry leaders say it’s too soon to predict how markets will react when federal tax credits and incentives in many states expire in 2016. But local producers expect the good times to continue, at least for now.
“I think markets will continue to grow at least for the next three years,” Lorenz said. “On the utility side, I’m very confident we’ll continue to see the growth rates we’re seeing now.”