Evolution Solar: China Now 'Center of Gravity' for Solar Manufacturing

Tempe, Ariz.-based Evolution Solar Corporation is officially moving out of the U.S. and into China, the new "center of gravity for the solar industry," the company said.

The firm first announced its relocation on August 4. This week it clarified the main reason:

"In the last century, the United States was the home of most television manufacturers. By the end of the century there were none left in America. They were all in Asia.

"The same is happening with solar energy and EVSO [Evolution Solar] has positioned itself to be a resource to the green energy revolution from its new base in China," the company said.

Even in the often rugged world of solar, those are some fighting words, and there are plenty more where they came from.

In explaining its move from Tempe to China, the company said that "China has developed a straight-forward, no-nonsense approach to reaching 2GW solar capacity by 2011." The U.S., meanwhile, "is still floundering with ad-hoc investments in clean energy."

The company sung China's praises for investing heavily in manufacturing and providing lucrative perks for installations. Government incentives for solar ventures there include a $2.70 per-watt tariff and 50 percent participation in the costs of many projects. The result is that the mega Chinese solar firms, like Suntech Power, are now able to sell their panels on the U.S. market below marginal cost, The New York Times recently reported.

At Suntech, almost 98 percent of production is now being hawked overseas. In just a few months, the company has almost overtaken Germany-based Q-Cells of as the world's second-largest producer of photovoltaic (PV) cells, behind current solar leader First Solar.

Longer term, nearly all solar providers in America will be sourcing their parts and components from China, predicts Evolution Solar. And it clearly wants a piece of the potential wealth.

The company is both developer of solar PV technologies and consultant for organizations on how to secure alternative energy contracts with public utilities. In China its goal is simple: "to gain significant efficiencies in both serving the Chinese market and sourcing products for the United States," said Robert Kaapke, CEO of Evolution Solar.

"We expect our China office to drive rapid growth in the company in the months ahead," he said.

That includes in the budding area of thin film, a technology made from a material called cadmium telluride. Thin film currently makes up around 20 percent of the world's solar market share, and growing.

In Tempe, Evolution Solar would face some stiff competition in this particular sector. Industry behemoth First Solar is also based there, and when it comes to affordable thin film, it's really the only game in town, churning out PV panels that are already just about as cheap as coal.

But for Evolution Solar, the future of all PV manufacturing is China, China, China. According to the company, even thin film is emerging there "at an impressive rate."

In a not-so-veiled swipe at the Obama administration, it drove its point home:

"Talking about change is very different form actually changing; we want to be part of real change and that is why we are setting down our roots where real change is taking place."

Certainly, the China versus U.S. story is a compelling one. And yes, China is making huge strides, largely due to heavy subsidization and substantially lower labor costs.

But American PV companies, namely First Solar and SunPower, are hardly out of the game. Both turned in solid second quarters under trying economic times, with $180.6 million and $24.2 million in profits, respectively. Suntech, on the other hand, made a profit of $10 million last quarter, a more than 80 percent drop over last year.