The real story about big solar in San Antonio

By on October 20, 2012

A Chicago-based CNN crew came to town recently, asking questions about the agreement between CPS Energy and OCI Solar Power — a deal that will bring 400 megawatts of clean solar power and at least 800 good-paying, long-term manufacturing jobs to San Antonio.

We were surprised by the negative tone of the subsequent story that ran Friday. It lacked details and understanding of how this project will in fact create significant jobs and manufacturing here in Texas and potentially across the U.S.

CNN’s story correctly pointed out that this is the largest solar contract in the country for a municipal utility, and the first of its kind in requiring a significant economic development component. Our request for proposals required the investment of more than $100 million in capital to stand up multiple manufacturing facilities, the creation of 800 permanent jobs, and an annual payroll of almost $40 million. This is the core of the economic development and separate from the hundreds of construction jobs required to build the factories or solar farms.

We also were looking to bring high-skill, capital-intensive manufacturing processes, not just panel assembly from parts manufactured elsewhere. CPS Energy received bid proposals from around the globe. Many of the bids included Asian or European manufacturers, because that is where these capabilities reside today. We want to change that dynamic, rather than enable it.

OCI Solar and its consortium delivered the best proposal for San Antonio, bringing significant manufacturing experience and the financial backing to establish a presence here. OCI Solar and their anchor partner Nexolon are dominant players in polysilicon production and wafer production respectively — the feedstock of the global silicon photovoltaic industry. Through this deal, their panel production process will be completed here in San Antonio. And because of that, they also are positioned to ramp production beyond San Antonio to serve North American and Latin American markets.

Just as Toyota has transformed our community by locating their Tundra and Tacoma manufacturing lines here in San Antonio, this deal also has the potential to transform our community. We anticipate new companies that support the OCI Solar consortium to set up shop here, too, bringing potentially thousands of highly skilled jobs. San Antonio is positioned to be a solar manufacturing hub for our country, and this is the start of that eco-system.

And just as Toyota has become an integral part of our community, we expect OCI Solar Power, Nexolon and the other consortium partners also to be become substantial corporate citizens, integrating into the fabric of San Antonio.

Our selection process was solid, and our project team included senior management, tenured energy and financial analysts and third-party consultants who carefully compared proposals that varied widely.

After reviewing all the proposals, it became clear that OCI Solar Power and its partners were best positioned to deliver, with a balanced package and the necessary financial strength to build and run manufacturing plants here. While price was important in the evaluation of proposals, factors like manufacturing experience, supplier diversity, financial support and the capability to fulfill their commitments also carried substantial weight.

It’s important to note that the OCI Solar consortium must deliver in order to earn the 400 MW of solar. There are numerous milestones along the way in terms of job creation and economic development that are tied to a phased implementation of the power purchase agreement. And OCI Solar bears the risk to stand up such a significant manufacturing base here in San Antonio.

CPS Energy is proud of this project and its potential for our community. We are excited that a renaissance for manufacturing to support the new energy economy in the U.S. could begin right here. It will benefit our customers by adding to our diverse resources that include coal, gas, nuclear, wind and solar. It will reduce emissions and lock in costs that protect our community from rising fuel prices. It will benefit San Antonio and Texas by creating more domestic manufacturing in an industry that is only growing. And it will bring hundreds of good paying, permanent jobs to the region and help secure San Antonio’s place in the new energy economy.

This Post Has 4 Comments
  1. Solar Bob on said:

    Cris, That sounds great, but can you explain the following: “OCI Solar will relocate its headquarters from Atlanta to San Antonio, establish an engineering and operations center and manufacturing of solar panels to San Antonio. Manufacturing processes further up the supply chain are too water intensive for Texas, Kotara said.” (SOURCE: http://www.renewablesbiz.com/article/12/03/solar-power-solar-panels&utm_medium=eNL&utm_campaign=RB_DAILY2&utm_term=Original-Member) It appears based on the comments of a CPS Energy senior-level employee, neither OCI Solar or Nexolon will bring those high-skilled manufacturing processed to San Antonio because of water concerns. Unless that employee was wrong. If he was, what exactly was the concern regarding water to begin with.

  2. Solar Valuechain on said:

    There are no water intense process for whole Photovoltaic manufacturing value chain. For example, very upstream components, poly silicon and Ingot/wafer manufacturing, requires intense energy not water and same for the cell manufacturing process. Imagine that most of the semiconductor manufacturer’s are located in Texas. No intensive water required to make a PV cell which is manufactured much simpler process than those of the semiconductor cell.

  3. CPS Energy Lisa on said:

    The executive was trying to clarify that in looking at solar manufacturing options, CPS Energy was focused on those that are low-water intensive, since we’re in South Texas. As with most of our projects, we were considering how to reduce impact on our natural resources and our environment. OCI Solar and its consortium partners are on track to deliver on their contracted milestones, which should result in several high tech manufacturing facilities in San Antonio.

    • Solar Bob on said:

      Lisa, You may not be familiar with solar manufacturing process, but the most water intensive part of the solar manufacturing process is the process to make the solar cell itself, and not the panels. In other words, solar cells and the wafers used to make solar panels would not be done in San Antonio as result of water (or lack thereof). Instead, we are only getting a solar panel assembly plant. Also, on practical business terms, it may be near impossible for OCI to build a plant in San Antonio: http://www.businessweek.com/news/2012-10-17/oci-slides-to-four-year-low-after-profit-plunges-87-percent There is excess capacity of polysilicon, and its derivative products such as wafers and cells, it will be very difficult for OCI investors to allow OCI and/or Nexolon to build a duplicate operation in the US, when current operations are losing money.

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