BERLIN -- Solar power will cost next to nothing. The fuel - the sun - is free. The price of the photovoltaic cells used to covert sunlight into electricity will plummet.
Just give it time.
That's the theory of Ian MacLellan, the founder, vice-chairman and chief technology officer of Arise Technologies, a Canadian photovoltaic (PV) cell company. But there's one small hitch: Arise doesn't have time.
PV cells are still expensive. The solar energy market needs priming. Arise shareholders want profits. Mr. MacLellan is 51 and would like to see his company make a buck before he's a senior citizen.
More Report on Business Stories
Enter Germany. The ever-so-generous Germans tracked him down and made him an offer he couldn't refuse - free money, and lots of it - as long as Arise promised to build a PV factory on German soil. The German love-fest even came with flowers for Mr. MacLellan's wife, Cathy.
Today, Arise's first factory is about a month away from completion in Bischofswerda, a pretty eastern German town about 35 kilometres east of Dresden, in the state of Saxony. Covering two storeys and 100,000 square feet, the sleek grey metal building will have some 150 employees and produce enough PV cells each year to power the equivalent of 60,000 houses. The value of the annual output, based on today's prices, will be $375-million, or more than three times the company's current value on the Toronto Stock Exchange.
"I couldn't build this in Canada," Mr. MacLellan said. "Germany is a very high-quality environment for us. I have nothing to worry about."
Arise couldn't build the plant in Canada because the level of financial incentives, engineering and construction expertise and general awareness of the growth potential of renewable energy simply don't exist there.
Those factors are abundant in Germany and it shows: The country has become the world leader in renewable energy technology, manufacturing, sales and employment. The German map is dotted with hundreds of renewable energy companies. They make PV cells, wind turbines, solar thermal panels, biofuels and technology for biomass plants and geothermal energy.
No PV cells are made in Canada. The Canadian solar industry, lured by money and markets, is jumping across the Atlantic and landing in Germany and a few other European countries with generous incentives.
The German and Saxony governments, with a little help from the European Union, offered Arise about €50-million ($80-million) in financing. The package included a €25-million grant, which is being used to offset half the cost of building the factory and installing the three assembly lines, and €22.5-million of working credit lines and equipment loans at highly attractive rates.
The land was cheap and included a handsome, though abandoned, brick building from 1818 that began life as an army barracks, became a dance hall after the First World War and a Soviet military barracks during the Cold War.
Arise plans to restore the old pile and use it as an office and corporate retreat. "We're turning an old military base into a solar factory - how 21st Century is that?" Mr. MacLellan asked.
Germany has created 240,000 jobs in the renewable energy industry, 140,000 of them since 2001, said Matthias Machnig, State Secretary for the federal Ministry of the Environment. Renewable energy technologies already make up 4 to 5 per cent of Germany's gross domestic product; Mr. Machnig expects the figure to rise to 16 per cent by 2025.
Renewables generated 14 per cent of the country's electricity last year, significantly ahead of the 12.5-per-cent target set for 2010. "We are making a huge investment in the markets of the future," Mr. Machnig said.
How did Germany turn green technology into a leading industry? And is the aggressive effort to attract renewable energy companies, backed by scads of taxpayers' money, a formula that should be imitated in Canada or its provinces? Mr. MacLellan thinks so. "I think Ontario is in a leading position to clone Germany," he said.
GERMANY'S VAST renewable energy industry is a careful and deliberate blend of industrial, political and green policies. Wind power has been leading the charge. Germany is a windy country and the ubiquitous wind farms generated 7.4 per cent of Germany's electricity last year.
With onshore wind energy growth starting to level off - offshore wind probably will take off once favourable regulations are in place - the Germans are injecting the photovoltaic industry with growth hormones. "In a few years, the PV industry could be bigger than the German car industry," said Thomas Grigoleit, senior manager for renewable energy for Invest In Germany, a government investment agency.
48