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Luncheon Remarks

Transforming the Glass City into
the Solar City:
Toledo’s Tradition of
Innovation and Entrepreneurship

Congresswoman Marcy Kaptur (D-Ohio)

Rep. Kaptur (D-Ohio) began by thanking the National Academies, and she said it was an honor to speak on a subject that “promotes economic and environmental sustainability and energy independence for our nation, which is my top priority as a member of the defense committee.”

She asked, “How can it be that Toledo, Ohio, ended up leading our nation in such a key area of energy independence.” First, she said, the power rates charged by investor-owned utilities along Lake Erie’s south coast to Cleveland are among the most expensive in the nation and constitute “a serious impediment to economic growth in our region. It is amazing that we have the industry we have in view of these incredible prices.” She said she also represented “the worst nuclear power plant in the United States,” which had averaged one incident per decade over the last two decades.

“Unlike regions that have subsidized power through a federal power marketing authority like Bonneville or the Tennessee Valley Authority,” she said, “we must reinvent our power future, drawing on our natural assets to be competitive in the global marketplace.” She said that there were no “cushions,” as there are in the government centers of Washington, D.C., and Columbus, Ohio, because she comes from “the free-market part of America. We have to grow and build wealth. We’re resentful that New York, Charlotte, and other financial centers have traded that wealth away. But we know what we have to do in order to build our future and America’s future.”

THE GLASS CAPITAL

A second reason this region of Ohio had built a reputation as a leader in new energy technologies, Congresswoman Kaptur said, is that Toledo historically has



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Luncheon Remarks Transforming the Glass City into the Solar City: Toledo’s Tradition of Innovation and Entrepreneurship Congresswoman Marcy Kaptur (D-Ohio) Rep. Kaptur (D-Ohio) began by thanking the National Academies, and she said it was an honor to speak on a subject that “promotes economic and environ - mental sustainability and energy independence for our nation, which is my top priority as a member of the defense committee.” She asked, “How can it be that Toledo, Ohio, ended up leading our nation in such a key area of energy independence.” First, she said, the power rates charged by investor-owned utilities along Lake Erie’s south coast to Cleveland are among the most expensive in the nation and constitute “a serious impediment to eco - nomic growth in our region. It is amazing that we have the industry we have in view of these incredible prices.” She said she also represented “the worst nuclear power plant in the United States,” which had averaged one incident per decade over the last two decades. “Unlike regions that have subsidized power through a federal power market- ing authority like Bonneville or the Tennessee Valley Authority,” she said, “we must reinvent our power future, drawing on our natural assets to be competitive in the global marketplace.” She said that there were no “cushions,” as there are in the government centers of Washington, D.C., and Columbus, Ohio, because she comes from “the free-market part of America. We have to grow and build wealth. We’re resentful that New York, Charlotte, and other financial centers have traded that wealth away. But we know what we have to do in order to build our future and America’s future.” THE GLASS CAPITAL A second reason this region of Ohio had built a reputation as a leader in new energy technologies, Congresswoman Kaptur said, is that Toledo historically has 100

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101 LUNCHEON REMARKS been known as the glass capital of the world. She reviewed some major Toledo companies that had succeeded in leading the glass industry, including Libby Owens Ford (now Pilkington), Johns Manville, Owens Illinois, and Libbey, Inc. These companies were supported by the region’s silica and lime reserves, and by glass physics research and generations of business leaders. Glass expertise, she said, had led to a range of skills around solar energy, including solar energy building materials, heat shields, and fiber optics. Her own interest in renewable energy began long ago, she said, and gained depth when she served as White House policy advisor to President Jimmy Carter. “I lived the oil embargo of the late 1970s,” she said, “and we all saw what it did to our country. It was the first slap in the face, really hard, and it knocked our teeth out.” She recalled President Carter’s message that what we endured was the “moral equivalent of war, and he remains right to this day. But the nation forgot his message.” She worked as a city and regional planner for almost two decades before running for Congress in the early 1980s. She said she was always interested in sustainability, at every level, and in building on natural assets. In the 1980s, the unemployment in her region was higher than she had ever seen it, and she realized she wanted to represent those in her community who were “up against the wall. I had to be their voice,” she said, “and that’s what motivated me to run.” “WOW, THEY CAN DO IT HERE” During the Reagan administration, Congresswoman Kaptur said, federal sup- port for photovoltaic research and alternative energy was substantially diminished, but in her congressional activities, she tried to promote photovoltaics and the re- search needed to make it more efficient. She recalled meeting Dr. Harold McMas- ter, who invited her out to a university laboratory to show her a vacuum chamber. He was about to build some of the first films for a company that has become First Solar. She was drawn to his enthusiasm immediately, and watched closely the com- panies he founded, which, she said, “all made money.” She recalled a time when a car company charged him with building an especially difficult window. “I thought, ‘You’ll never be able to build it, it will crack.’ On the day when the first rear window came off the line, it didn’t crack. We all went, ‘Wow, they can do it here.’” “I watched this gentleman who loved our community,” she said—“a great philanthropist. He and his colleagues invested in our local school system, gave millions of dollars to our university, knew what it was to build a community and a country. They respected one another and they knew they had to move America forward. I remember their boundless vision to produce a new generation of research and innovation for our country. They were both scientists and entrepre - neurs at the same time, and they never quit innovating.” Congresswoman Kaptur gave Dr. McMaster and others full credit for “doing so much when America was asleep.” In 2007 the Economist magazine described Toledo as one of the six places on earth with real strength in new solar-powered

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102 FUTURE OF PHOTOVOLTAICS MANUFACTURING systems and one of only three in this hemisphere. “This it isn’t by accident,” she said. “It’s because many people have given their lives to it.” She said that Ohio had just recognized the two-decade-long effort pursuing innovation and R&D by funding the Wright Center for Photovoltaics Innovation and Commercialization at the University of Toledo. She praised the university for its progress in PV, and recalled that at a recent World Energy Conference in Abu Dhabi, the United States was represented by only two universities—MIT and the University of Toledo. SOME “BRUTAL FIGURES” ON ENERGY USE Congresswoman Kaptur reminded her audience of some “brutal figures” on energy use. In 2006, she said, a third of the U.S. trade deficit, which now ap- proaches three-quarters of a trillion dollars, was from imported oil. “This,” she said, “is a national security issue for our country.” Just as the disadvantage of importing fuel is obvious, she said, so is a solution: to develop a comprehensive plan to better use our domestic resources. “We are about that full-bore in our region,” she said, “to recapture that three-quarters of a trillion dollars a year of lost wealth back here at home.” She listed the technologies that can contribute to this strategy, including domestically produced biofuels, wind power (“Lake Erie is the Saudi Arabia of wind”), the solar sector, geothermal power, hydrogen fuels, wave power, and fuel cells. The potential of these new markets “is limited only by our technological and industrial imagination,” she said. With half as many sunny days as Portugal, she said, the world’s leading solar energy producer now is not the United States, but Germany. That country now accounts for 15 percent of worldwide sales in solar panels and other photovoltaic equipment, and has 15 of the 20 largest solar plants. “That’s right,” she said, “a country located in northern Europe, with fewer sunny days than Toledo, with no natural advantage, is outperforming the rest of the world—because it sees the future.” MORE SUBSIDY FOR NUCLEAR THAN FOR SOLAR Congresswoman Kaptur compared the U.S. commitment to solar energy with its commitment to nuclear power. Today nuclear power generates a large propor- tion of our electricity, she said, but this happened through a concentrated and deliberate approach to broaden our electrical usage. Between 1943 and 1999, she said, the nuclear industry received over $145 billion in federal subsidies, without counting tax subsidies. By contrast, the solar power industry had received some $4.4 billion and the wind power industry $1.3 billion. “We haven’t even begun to fight,” she said. “The fiscal cost of our continued dependence on oil can be measured in many ways.” She said that in 2009 the United States will spend over $600 billion on defense, the largest amount in U.S. history. She said that much of that amount is spent to protect the Arabian Gulf

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103 LUNCHEON REMARKS region and central Asia, which together account for at least 64 percent of the world’s petroleum reserves, 34 percent of its crude oil production, and 46 percent of its natural resources. “For each of you, as citizens of this republic, you have to ask, is this the world you want for your children,” she said. “And if it is, you don’t have to change anything.” Change can come, she said, through two things: First, a stable, long-term funding strategy focused on basic energy research. Second, significant resources devoted to commercialization of energy technologies. “From personal, residen - tial, and vehicle to business uses,” she said, “the commercialization of this tech - nology is key to transforming our economy and converting technologies from the laboratory to the consumer.” This is extremely difficult to do from a local or regional base, she said. One way to start was to build the kind of demonstration project now installed at the 180th Fighter Wing in Toledo, where solar cells now produce a 1-MW research base. “We’re going to keep pushing the science,” she said, “and equally important, pushing the economics.” The head of the base had asked her why the national guard plant was able to sell its excess power to the utility for 3 cents/kWh, while the base is charged 9 cents/kW hr when it buys power from the utility. This, she said, was an example of economics that need to change. CHANGING OUR THINKING “FROM THE INSIDE OUT” Another change Congresswoman Kaptur suggested was a change in think - ing. She described a 5-mile corridor recently dug for a seven-foot storm-water main. She mentioned to the utilities director that he could use that same corridor for electrical power that would allow local residents and businesses to tap into a new grid. “We would invest in it ourselves,” she said, “use the bonding power of our city through its utilities department, put up solar power installations, and pay for them over 25 years.” The utilities official acknowledged that he had not been trained to do those things. “I told him, ‘Well, you know how to dig holes, and you’ve got assets at your fingertips.’ We have to change our thinking from the inside out. We have to think about the power we are abdicating every day and retrain a whole generation of people to live in a new energy age.” One reason Toledo had been so successful in spinning off solar technology, she said, was that it had created a close partnership between the university, in- dustry, and government. “They’re all working together,” she said. “Partisanship doesn’t matter to them. Science matters, business matters, energy independence matters. We have sustained our commitment to basic research as a prerequisite to the development of solar companies, and we will never stop pushing the science.” At the University of Toledo, two vehicles for doing this had been the Clean and Alternative Energy Incubator and the Clean Energy Alliance of Ohio, which both educate private interests in the technologies developed in the universities. Congresswoman Kaptur concluded with a plea for “regionalized federal

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104 FUTURE OF PHOTOVOLTAICS MANUFACTURING efforts” to transform science from the experimental stage into commercial tech - nologies. As the population continues to increase and make their claims on natural resources, she said, the challenge is to “sustain this country” and “be a partner in the world for a sustainable earth. Part of the answer has to be renew - able energy capitalizing on the historic strengths of places like Toledo. But we all have to see that same future and that same possibility. We have everything we need right in our area, including the sun. Even the symbol of Toledo has a rising sun. It’s perfect.” DISCUSSION A participant spoke out on behalf of “a huge collaboration to get this tech- nology moving faster and in a sustainable manner.” He suggested that models, if not the actual collaborative programs, are already in place. “But I have not heard any response from the people who are already involved in solar development as to whether or not they accept the need for something as vast as these collaborations, and whether they would consider joining.” Dr. Zweibel responded that when he was at the National Renewable Energy Laboratory, his colleagues formed research collaborations that were national in scope, and some of which still existed. Researchers from many institutions met with counterparts from universities and companies to discuss their work, then returned to their home labs to work. Six months or so later they would meet again with their partners, return home again, and so on. “These collaborations had the essential element of continuity,” he said. “I think collaborations are most success- ful when they start simply. If you want to understand solar cells, you start with knowing what you need to do on a small scale. You keep doing that iteratively on larger and larger samples and you get better and better at it. Once you have the technology in place you can go to the next level of collaboration.” Alvin Compaan of the University of Toledo thanked Congresswoman Kaptur for her comments and support for photovoltaics over many years. He referred to earlier discussions about challenges presented by East Asian and other govern - ments that offer large incentives to solar companies, and the need to level the playing field. He asked what discussions were under way in Congress about these issues. Congresswoman Kaptur replied that she worried a great deal about whether U.S. trade policies and tax policies were fair to U.S. business, including those in renewable energy fields. She said that they were not fair, and U.S. busi- ness faced “severe disadvantages” in the global market place. As an example of unfair trade laws, she pointed to automobiles: “Fewer than 3 percent of the cars in Japan are from any other country, whereas more than half the products sold in the United States are from abroad, or from companies from abroad operating in the United States. We’re the dump market of the world.” Congresswoman Kaptur proposed one possible way to help rebalance this situation. “If the federal government has money invested in a new technology,

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105 LUNCHEON REMARKS we might simply extend the patent term to allow production to occur only in the United States.” She said a regulatory change would be simpler to execute than a trade or tax law, as long as it was legal under GATT and WTO. “What troubles me,” she said, “is to see someone in my district trying to birth new industry, but another company can simply take all their innovation and move it somewhere else where people work for low wages. My biggest worry is that somebody’s go- ing to walk off with 100 years of effort who won’t love our community like Dr. Compaan, Dr. McMaster, and Norm Johnston.”