Sunshine Day - As the prices for energy increase, so does the demand for photovoltaic technology, which is music to Eric Peeters' ears. As Dow Corning Solar Solution's global executive director, Peeters helps drive the innovation needed to push the solar industry forward. Brandi Schuster asked him about how the company weathered the economic downturn; trends in innovation; and what we can expect in 2010 from the world of photovoltaics.

CHEManager Europe: What kind of demand have you been seeing in the solar industry?

E. Peeters: Global demand for solar solutions continues to grow as the solar industry moves towards being economically competitive with conventional energy sources. While demand slipped a bit - like most industries did with the global economic downturn - the long-term outlook for solar continues to be strong as countries and regions seek clean, renewable energy while securing domestic supplies of energy.
To satisfy that demand, Dow Corning and our joint venture, the Hemlock Semiconductor Group, have invested nearly $5 billion in solar materials manufacturing and technology development in the last four years. Of that, Hemlock Semiconductor is investing up to $3 billion to add up to 34,000 metric tons of polysilicon capacity to the industry in the next four to seven years.
In addition, last September we began construction of a manufacturing plant that will manufacture monosilane gas-a key material used to manufacture thin-film solar cells. This facility represents an investment of hundreds of millions of dollars and will significantly increase the supply of a key material used in the manufacturing of solar thin-film technologies-enabling that technology to continue to grow and innovate.

Has it fluctuated during the worldwide recession?

E. Peeters: The solar industry is thriving. Today, it represents a $19 billion market, up from just $8 billion only two years ago. For the past several years, the industry was growing at a rate of 30-40% per year - and while the global economic downturn is impacting the industry, over the long term we believe tremendous growth will continue.

Do you see a direct relation between demand for photovoltaic and oil prices, in that the interest for solar energy grows when the price per barrel of oil increases?

E. Peeters: No, there is a stronger correlation between electricity generation prices and photovoltaic demand. Dow Corning's goal is to help the industry become economically competitive with traditional energy sources. As electricity prices continue to increase over the long-term, and as the world becomes more conscious of the environmental cost of certain traditional energy sources, solar energy will increasingly become a more attractive alternative.

What are the trends we can expect within photovoltaic in 2010?

E. Peeters: The entire industry is working toward higher efficiency, durable performance and lower cost per watt to become an affordable, reliable energy source. What's really important in a solar panel is not just how much energy is generated in the first minute of its life. What is important is that after 25 or 30 years, nearly the same amount of energy is produced, increasing the return on investment. Durability and performance are essential in achieving cost reduction, and therefore, in making solar energy a viable alternative energy source.

What does your company do to encourage innovation?

E. Peeters: Innovation is the responsibility of all employees and our work environment, expectations, and rewards reflect that. We are training and retaining smart, energetic and focused employees who know our business, our customers' businesses, and the specific requirements of the solar industry. We empower them to make decisions and take controlled risks.
In our offices around the world, innovation has become ingrained in our culture. By maintaining a broad, holistic view of innovation, we create an open, collaborative, and supportive culture-starting at the top of our organization. By giving our employees the flexibility to experiment and take risks, to create and reinvent, and to learn and share, they will flourish, ideas will bloom, and our company will prosper.
One way is through a thorough understanding of local needs. There is no one-size-fits-all approach to innovation or to customer needs. We pride ourselves on having a commercial staff with in-depth understanding of local customs, cultures, customer requirements, and government regulations.
It's important to note though, that even as we encourage our employees to take controlled risks, our experts are building on proven solutions developed over nearly seven decades. They take those solutions to a new level of performance to meet industry needs, in this case the specific needs of the solar industry. So we balance risk with proven silicon chemistry to achieve what we refer to as Proven Innovation.

How important is China for your company's silicon business?

E. Peeters: While we continue to monitor the global economic environment, we are very bullish about the potential of China. China remains one of the top priorities for Dow Corning.
Dow Corning's investment in China has reached more than 840 million USD. Our investment in China is guided by our commitment to support local economic growth and sustainable development - which means we will keep our rate of strategic investment there. In fact, one of Dow Corning's most important tasks in 2010 is in China - the second-phase construction of our Zhangjiagang site, a 1.8 billion USD joint venture that will be China's largest integrated silicone manufacturing site.
Covering 1 million square meters, this integrated site includes two new upstream production facilities of siloxane and pyrogenic silica, which are jointly operated by Dow Corning and another well-known company, and also finishing plants of both companies, which are owned and operated separately with independent marketing and sales by each respectively. The combined capacity for siloxane and pyrogenic silica is planned to be approximately 200,000 metric tons per year. Phase 1 of the joint projects began operation in November 2008.
It is expected that full operational capacity will be phased in by the end of 2010. Through the Zhangjiagang production complex, Dow Corning intends to serve growing customer demand for silicone materials in China and throughout the Asian region.

What other regions do you see room for growth?

E. Peeters: We are seeing significant growth in demand from Korea, Brazil, the Middle East region and also India, and we are certain that the other countries of the region will be gaining ground rapidly too. When it comes to what we are supplying, we would say that presently there is little segmentation in the market. For example, 99% of the modules supplied operate the same, employing comparable technology. However, we anticipate the market to change considerably in the next few years, with a greater degree of segmentation. For example, there is a diverse range of conditions in Asia: from dry deserts to high humidity to polluted cities. Technology must evolve to serve each of those markets in the most efficient, and appropriate, way. When technology evolves to meet the unique requirements of the target market, there will be a necessary shift in the demands on raw materials. We need to anticipate the needs of these evolving markets with differentiated material solutions.

What is your company doing to support the development of the solar industry around the world?

E. Peeters: Our goal is to help the solar industry move towards being economically competitive with conventional energy sources, and become a sustainable energy option globally. We will do this by being an active, eager collaborator with researchers, producers and governments as we help develop affordable and efficient solar energy for the global energy market.
We bring to the solar industry the same kind of in-depth understanding of chemistry and technology that we've been applying to many other industries. We are building on the inherent qualities of silicon-based materials, to bring advantaged material solutions to the solar industry, and we are focusing all our efforts on the most critical needs facing the industry: reducing total cost per kilowatt hour, providing a reliable supply of materials to support the industry's continued growth, and improving the durability and performance of photovoltaic modules.
We are one of the only companies in the world able to provide advanced silicon-based solutions throughout the entire solar value chain - from the polysilicon produced by our joint venture Hemlock Semiconductor right through to essential materials that are used in solar panel fabrication and assembly.
In addition, we have Solar Solutions Application & Business Centers in Freeland, Michigan and Newark, California and another scheduled to open this year in JinCheon, Korea to support customer sales, product evaluation and the development of a commercialization strategy.

Dow Corning has identified four fundamental policy goals for making America a 21st Century solar power - do you have similar plans for other parts of the world?

E. Peeters: We expect to be a leading voice in promoting alternative energy solutions throughout the world. Our effort in the U.S. was a unique opportunity to help shape a legislative agenda in what is really an emerging market for renewables, and solar specifically, that did not have a public policy as clearly defined as some other geographies.