Recent news has been filled with reports of a U.S. solar industry under pressure from Chinese competition and struggling through the bankruptcies of several solar panel manufacturers. A closer look, however, reveals that the industry’s fundamentals remain strong despite isolated company troubles, and Ohio’s solar industry, in particular, is poised for continued growth.

The Ohio Picture

In July, the Solar Energy Industries Association (“SEIA”) reported that Ohio's solar panel manufacturing base rose by 50 percent during the first three months of 2011. At least three solar panel manufacturers in Ohio are expecting to start or increase production over the next year.

Isofoton, a Spanish solar-panel maker, also plans to open a $32.2 million manufacturing plant in Napoleon, Ohio (Henry County) that will start operations by early next year.

Willard & Kelsey Solar Group LLC makes cadmium telluride thin-film solar panels and is based in Perrysburg. The company reports planned expansion to four production lines by mid-2012 with an estimated 300 MW of solar panels produced per year.

Based in Tempe, Arizona, First Solar Inc. has its only North American manufacturing facility in Perrysburg, Ohio. The company plans to expand its operations to an estimated 256 MW for 2011.

Solyndra Bankruptcy Draws Scrutiny, Industry Fundamentals Remain Strong

While the solar panel manufacturing industry in Ohio continues to grow, three U.S. module manufacturers filed for bankruptcy protection in August, most notably, California-based Solyndra LLC, leading to scores of news reports examining Solyndra and the solar market as a whole.

Solyndra’s bankruptcy has drawn increased scrutiny, in part, because the company received more than $500 million in federal loans. Solyndra claimed that competition from government-subsidized Chinese manufacturers was insurmountable. Industry observers have pointed out, however, that while foreign competition may have contributed to Solyndra’s struggles, other, more fundamental problems led to the company’s demise.

The biggest issue for Solyndra was that its product—a solar module based on copper indium gallium selenide (“CIGS”) technology—was not financially viable amid dramatically decreasing silicon prices. Solyndra started developing its CIGS technology several years ago when the price of silicon, the building block of traditional solar technology, was becoming prohibitively high and solar manufacturers were looking for alternatives. Fast forward to 2011, and the market has changed, silicon prices have fallen, and those alternative solar technologies are no longer economically justifiable.

Importantly, the drop in silicon prices is making solar more competitive with fossil fuel energy sources and leading to rapid adoption in the marketplace. As reported by The Vote Solar Initiative, a number of reports from industry groups and independent consultants highlight solar’s strong growth. The quarterly U.S. Solar Market Insight report from GTM Research and SEIA showed continued record-breaking growth in the first part of 2011. The report found that year-over-year, the amount of new solar PV installed grew 66 percent, domestic solar manufacturing grew 31 percent, and another 1.1 GW of utility-scale solar is currently under construction. The National Solar Jobs Census from the Solar Foundation found that the growing U.S. solar industry supported 93,500 jobs in 2010, with more than half of all solar employers planning to expand their work force in 2011.

Ohio Solar Industry Reflects Broader Trends, Midwestern Manufacturing Strengths

The success of the Ohio solar industry fits into this broader story of industry growth. Some Ohio companies are developing thin-film technologies and other unique products that are finding a niche in the market. Others are focusing on more established crystalline silicon technologies, and advances on them, to build a model. In both cases, they seem to be successfully avoiding the potential risks in unproven or expensive technologies that ultimately caused Solyndra’s failure.

Also working in Ohio’s favor is that many of Ohio’s solar companies are more established than the recently failed start ups. Isofoton, for example has been in existence for 30 years and has projects in 65 countries around the world. Ohio and the Midwest are also traditional strongholds for manufacturing, with a proven and ready workforce, infrastructure, and support systems for manufacturers.

Time will tell if Ohio solar manufacturers can continue their long track record of success. However, the market indicators are very positive.