The Fight To Harness The Sun

 

While he works to develop this network of joint-venture partners, Little has kept Spire in the contract research business, which not only brings in revenue but keeps the company on its technical toes. Technological obsolescence is a potential problem that Little thinks he can convert to another sales opportunity. "Nobody," he says, "is stupid in the world. They say, 'Okay, if I buy this [equipment] now, am I going to dead-end down the line somewhere?' We have to assure them that their technology will evolve." Spire, Little says, stays in touch with change in the technology by performing industryand government-sponsored research. "The other thing we do," Little says, "is look for commonality, so that when we build a piece of equipment it will handle as many different technologies as possible. We're always worried about obsolescence."

And Spire is attempting to increase its sales of fabrication equipment to the established solar cell manufacturers here, in Europe, and in Japan. Bill Murray of Strategies Unlimited, the market analysts, predicts that the U.S. photovoltaic industry will eventually sort itself out into companies that make cells and companies that make cell-fabrication equipment. So far, he says, "Spire is the fabrication industry." But he wonders whether the company may be premature with its product.

So long as Spire was primarily an R&D company that worked on contract, its capital needs could be met largely out of cash flow. "Now that we're going through that classic transition from R&D to manufacturing," Little says, "our needs have changed. We've got work in progress, we've got marketing costs, and we need a lot more working capital." Spire is looking for $2 million to $3 million, and so far it has been turned down by venture capitalists and by large corporations. Either they don't see an early payoff, Little says, or they think they are going to be competing with the oil companies, and they don't want that. Little is looking into taking Spire public, a move only two or three other independent photovoltaic companies have made. He says investment bankers have urged him to rewrite his business plan to de-emphasize Spire's involvement in energy, a field they say today's investors are wary of, and emphasize Spire's activity in the electronics industry.

If he can get through the next year or two, says consultant Maycock, Little's international marketing plan will work. "Every country wants to make its own product," Maycock says, "and they'll like Spire's equipment. In effect, Spire locks up a country.

Aside from whether it will work, Spire's business plan holds two elements some find troubling. The first involves Maycock's point that once Spire makes a deal in a developing country, any other solar-cell maker will have to contend with tariff barriers to free trade. Isn't that a bit, well, underhanded, when we are supposed to be promoting free trade? "I don't believe," says Berman at ARCO Solar, "that Roger Little's is the industry of the future. That says that there's no export business for anybody but Roger."

The second troublesome element is Spire's export of technology developed, at least partly, with federal R&D funds. "I am afraid," Rep. Berkley Bedell (D-Iowa) told a congressional subcommittee hearing in December, "that other nations are going to run us out of the international [photovoltaic] market using our own technology. I am afraid that U.S. jobs and U.S. exports will be transferred overseas to our competitors.

Berman may be right and so may Bedell. But consider, again, Little's alternatives at Spire. "We could have tried," he says, "to manufacture solar cells, but we recognized that the competition was just too awesome. We could have gone into systems and offered solar-powered water pumps internationally, but we didn't have a large marketing staff or the experience. We chose the equipment route because that's what we knew best, and we could do it with less capital."

It may not be fair that foreign photovoltaic companies get subsidies and marketing help from their governments; it may not be fair that the U.S. government has cut its solar spending; it may not be fair that oil companies scare off other potential solar investors. But that is the way it is, and, as Little says, "We still have to earn a living." You do what you have to do.

"I think Berkley Bedell has a point," Little says, "but if, indeed, distributed manufacturing is going to take place, and it is, somebody is going to make those machines and supply the technology. The Europeans and Japanese have already expressed an interest in buying the rights to manufacture our equipment. If they do, then we'll have just that many fewer jobs. What I'm responding to is what world economists recognize as world trends. I'm not creating anything new."

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