Recently announced projects by solar energy companies Savion, LLC and First Solar, Inc. may result in significant renewable energy construction in upcoming years: The two companies recently gained approval for the construction of three solar farms and a solar panel production facility in Ohio during 2021 and 2022.
Savion will be building its 180-megawatt Madison Fields Solar Project in Pike Township, Ohio, intended to begin construction in the fourth quarter of 2021, and the 200-megawatt Atlanta Farms Solar Project in Pickaway, Ohio, intended to begin construction in “mid-to-late 2021”.
First Solar will be constructing the 196-megawatt Big Plain Solar project in Madison County’s Fairfield and Oak Run townships. With the project currently going through the 6-9 month State of Ohio permit process, First Solar construction claims that the project could begin construction in late 2021 or early 2022, with site completion and the start of operations in 2023.
However, these projects may take a back seat to First Solar’s construction of a $680 million solar panel manufacturing plant in Lake Township — a project that is also expected to add 500 full-time jobs to the company’s roster and could significantly increase the number of solar farms in the United States, as the company projects it to expand the country’s solar manufacturing capacity by 3.3 gigawatts yearly.
President Biden’s administration has offered support for the facility, as well. In tandem with First Solar’s press release, US Energy Secretary Jennifer M. Granholm said that “These investments in American-made solar technologies are the perfect embodiment of President Biden’s strategy to build out domestic manufacturing and supply chains for critical industries” — following up on Savion CEO Mark Widmar’s claim that “…we stand ready to support President Biden’s goal to transition America to a clean, energy-secure future…this new facility is First Solar making good on that commitment.”
“As a partner to our solar program since 2003 and a DOE loan guarantee recipient in 2012, this company is a great example of how investment and innovation can build the clean energy future right here at home—shoring up American competitiveness and bringing good-paying jobs to all pockets of the country,” Granholm continued.
Construction and responsibilities may differ — with some projects more stable than others
Despite working on similar projects, project construction and responsibilities for the Savion and First Solar projects may differ greatly between each company’s business and construction focuses — differences which contractors may want to keep an eye on, as funding and project support may shift depending on them.
A large part of Savion’s business model has been site planning and pre-development, as the company has gotten sites planned and ready for projects before selling the project to other companies who handle the construction and engineering necessary to bring a solar plant to operation.
Savion CEO Rob Freeman notably said in 2019 that “Our main business is to identify sites we believe will be good for large-scale solar projects, and then we fully develop them out. Once the project is construction-ready, that’s the point we typically look to sell it to someone who wants to construct and operate the project.”
“There’s also a significant market with utilities wanting to acquire constructed solar projects that are just hitting the market, which is known as a build/transfer. We will be very much involved in that market as well, building then selling the project,” Freeman added.
This is very much in line with Savion’s recent operations. In March 2021, the Kansas City-based company sold its 260-megawatt Brazoria West Solar Project in Texas to S&B USA after planning the project and getting it ready for its nearly $265 million construction process.
In contrast, a press release from First Solar regarding its new 1.8 million square foot manufacturing plant suggests that the company’s goal is self-sufficiency, claiming that the company “intends to fund construction of its third US manufacturing facility…with existing cash resources.”
First Solar is a bit more straightforward about the facilities that will need to be constructed, as well, putting emphasis on the need for companies involved in high-tech construction:
“The facility will combine highly skilled workers with Industry 4.0 architecture, machine-to-machine communication, artificial intelligence, and Internet of Things connectivity to produce a higher degree of automation, precision, and continuous improvement.”
“While designing and building this factory of the future we’re challenging ourselves to focus on the continuous improvement of our throughput, quality, and safety through automation without losing sight of our greatest strength, our people,” said Mike Koralewski, First Solar’s chief manufacturing operations officer.
“We see this as an opportunity for our associates to upskill, learn new technologies, continue to grow and develop themselves as our factories and products continually evolve.”
Additionally, it appears that First Solar’s Big Plain project will also be completely funded and constructed by the company, providing the project more financial stability than one that is being planned and sold. A document describing the project’s phases notes that First Solar is the owner, developer, and builder.
The same project overview attempts to be fairly clear with its industry impact: It claims that the project will create nearly 400 construction jobs at its peak, and the project will also be decommissioned “at the end of its useful life” — pointing to more work for contractors in the coming years.
Amidst significant promise, the recent solar construction boom has come with risks — and requires construction expertise
Even during the major growth of the solar industry — with large projects similar to Savion and First Solar’s recent expansions, and the installation of a record 137 gigawatts of solar facilities in 2020 — profitability has been an issue for companies.
“As a small business, you have to profit — you can’t go to the markets to get capital like the big companies can,” said Stephen Irvin, chief executive of Amicus Solar Collective, a company that helps small solar installers purchase panels.
As Levelset’s Elizabeth Gunto reported in February 2021, major solar companies Sunrun and Sunnova Energy — two of the United States’ largest residential home solar manufacturers — “lost a combined $500 million despite their dramatic stock increases” in 2020 which saw jumps of 300% and 400% in value for the companies.
“Solar insiders told the Chicago Tribune that the industry’s rapid growth and the large upfront costs that installations demand are to blame for some of these losses. The collective cost of operations and purchases of solar systems of Sunnova and Sunrun cost $1.3 billion in cash last year,” Gunto continued.
These difficulties of growth are likely to continue, as well, due to the significant environmental and financial benefits that can be offered by solar systems. Rewiring America — a group working to address climate change — estimates that the average American household could save as much as $2,000 a year with solar energy systems, and the Chicago Tribute noted that natural disasters in 2020 have significantly raised interest in home solar installations.
T.R. Ludwig, a founder of Brooklyn SolarWorks and a former Sunrun employee, emphasized the importance of construction expertise in solar development, saying in January 2021 that “Solar is sort of this magical technology, and it’s very alluring, and everyone wants to think it’s different from everything else,” while adding that “apart from the financing, it really is a construction project.”
As the Chicago Tribune added, “Ludwig contends that the solar business is more like the heating, ventilation and air-conditioner business, which is made up of local firms installing and servicing products made by national or global manufacturers.”
While businesses push forward with both substantial growth and financial insecurity in the industry, Levelset’s Matt Viator notes that “lien rights can get tricky when it comes to solar projects” from state to state.
However, contractors have been protected by lien rights in a number of significant recent projects — claims which do also emphasize the financial dangers of such projects.
Duke Energy’s 200-megawatt Rambler Solar Project in San Angelo, Texas faced a total of $12,894,718.40 in liens at one point in its construction, while three subcontractors were owed $16,690,820.45 for labor and materials at the Oberon Solar farm in Odessa, Texas during 2020.