Worst May be Over for Solar

By Clare Baldwin

SAN FRANCISCO, April 6 (Reuters) -

The worst of the economic downturn may have passed for renewable energy and the solar industry, the chief executive of solar equipment manufacturer Oerlikon Solar said in an interview on Monday.
But the unit of Swiss technology company OC Oerlikon Corp Inc is still searching for new funding from inside or outside the company, Oerlikon Solar Chief Executive Jeannine Sargent told Reuters by phone.
"Solar will be one of the industries that will emerge from this recession on the earlier side. We've seen the worst of the environment on an average global basis for solar and renewables in the first half of '09," she said.
The positive impact of the U.S. government's economic stimulus plan has offset pressure from the economic crisis, she said.
There is a growing demand for electricity in the United States, said Sargent. That, paired with the stimulus plan, counterbalances the impact of the worldwide economic crisis on solar and creates a business environment that is neutral or slightly positive.
"We're in a positive trend in the United States and the demand will be accelerated due to the stimulus package."
Parent company OC Oerlikon Corp on March 26 said the company did not expect to post a profit in 2009 and it was looking for new capital and possible asset sales. Chief Executive Uwe Krueger said solar could be an area where Oerlikon would agree to a partner -- or look for equity participation, as he put it.
"We have confirmed solar is a core focus... but also understand we may need additional investment. We will look at both internal and external means of creating that funding source so we can support the growth of solar," said Sargent on Monday.
"We will increase the investment and we will enable the growth of the solar business," she added.
Her bullish comments about solar contrasted with other gloomy signals. U.S. competitor Applied Materials Inc on Monday said that a sales agreement it had to supply solar production equipment to a private company has been slashed to $250 million from $1.9 billion due to a worsening global economy.
And Merrill Lynch last Thursday downgraded the cleantech market because it said businesses won't improve much until 2010. "The stimulus effect may come later rather than sooner and cleantech returns on capital are low, limiting the upside," the brokerage wrote in a report.
Oerlikon Solar said that government support also could lead to new solar factories in the United States and that utilities would start to take lead roles in building their own plants. Oerlikon Solar sells equipment for making solar products.
"We expect that the utilities will play a much more significant role moving forward in terms of providing financing for PV (photovoltaic) projects that they own directly," Chris O'Brien, Oerlikon Solar's head of market development for North America said in the same interview.
"It's possible that new customers in the United States and particularly our European customers, as they expand, might find a good economic model in the U.S. market versus expanding in Europe," added Sargent. (Reporting by Clare Baldwin 1-415-677-2547, editing by Peter Henderson and Carol Bishopric)