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Charles W. Wessner, Rapporteur
Committee on Competing in the 21st Century:
Best Practice in State and Regional Innovation Initiatives
Board on Science, Technology, and Economic Policy
Policy and Global Affairs
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THE NATIONAL ACADEMIES PRESS 500 Fifth Street, N.W. Washington, DC 20001
NOTICE: The project that is the subject of this report was approved by the Governing
Board of the National Research Council, whose members are drawn from the councils of
the National Academy of Sciences, the National Academy of Engineering, and the Institute
of Medicine. The members of the committee responsible for the report were chosen for
their special competences and with regard for appropriate balance.
This study was supported by: Contract/Grant No. DE-AT01-06NA26358, TO #28, between
the Department of Energy and the National Academy of Sciences. This report was pre -
pared by the National Academy of Sciences under award number SB134106Z0011, TO #4,
from the Technology Innovation Program of the National Institute of Standards and Tech -
nology (NIST), U.S. Department of Commerce. The statements, findings, conclusions,
and recommendations are those of the author(s) and do not necessarily reflect the views
of NIST or the U.S. Department of Commerce. This report was prepared by the National
Academy of Sciences under award number 99-06-07543 from Economic Development
Administration, U.S. Department of Commerce. The statements, findings, conclusions, and
recommendations are those of the author(s) and do not necessarily reflect the views of the
Economic Development Administration or the U.S. Department of Commerce. Additional
funding was provided by The Heinz Endowments, Acciona Energy, Dow Corning Corpora-
tion, IBM, SkyFuel Inc., and the Association of University Research Parks. Any opinions,
findings, conclusions, or recommendations expressed in this publication are those of the
author(s) and do not necessarily reflect the views of the organizations or agencies that
provided support for the project.
International Standard Book Number-13: 978-0-309-14214-4
International Standard Book Number-10: 0-309-14214-8
Limited copies are available from Board on Science, Technology, and Economic Policy,
National Research Council, 500 Fifth Street, N.W., W547, Washington, DC 20001; 202-
334-2200.
Additional copies of this report are available from the National Academies Press, 500 Fifth
Street, N.W., Lockbox 285, Washington, DC 20055; (800) 624-6242 or (202) 334-3313
(in the Washington metropolitan area); Internet, http://www.nap.edu.
Copyright 2011 by the National Academy of Sciences. All rights reserved.
Printed in the United States of America
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The National Academy of Sciences is a private, nonprofit, self-perpetuating society of
distinguished scholars engaged in scientific and engineering research, dedicated to the
furtherance of science and technology and to their use for the general welfare. Upon the
authority of the charter granted to it by the Congress in 1863, the Academy has a mandate
that requires it to advise the federal government on scientific and technical matters. Dr.
Ralph J. Cicerone is president of the National Academy of Sciences.
The National Academy of Engineering was established in 1964, under the charter of
the National Academy of Sciences, as a parallel organization of outstanding engineers.
It is autonomous in its administration and in the selection of its members, sharing with
the National Academy of Sciences the responsibility for advising the federal government.
The National Academy of Engineering also sponsors engineering programs aimed at
meeting national needs, encourages education and research, and recognizes the superior
achievements of engineers. Dr. Charles M. Vest is president of the National Academy of
Engineering.
The Institute of Medicine was established in 1970 by the National Academy of Sciences
to secure the services of eminent members of appropriate professions in the examina -
tion of policy matters pertaining to the health of the public. The Institute acts under the
responsibility given to the National Academy of Sciences by its congressional charter to
be an adviser to the federal government and, upon its own initiative, to identify issues of
medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute
of Medicine.
The National Research Council was organized by the National Academy of Sciences in
1916 to associate the broad community of science and technology with the Academy’s
purposes of furthering knowledge and advising the federal government. Functioning in
accordance with general policies determined by the Academy, the Council has become
the principal operating agency of both the National Academy of Sciences and the Na -
tional Academy of Engineering in providing services to the government, the public, and
the scientific and engineering communities. The Council is administered jointly by both
Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest
are chair and vice chair, respectively, of the National Research Council.
www.national-academies.org
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Committee on
Competing in the 21st Century:
Best Practice in State and Regional Innovation Initiatives*
Mary L. Good, Chair Michael G. Borrus, Vice Chair
Donaghey University Professor Founding General Partner
Dean, Donaghey College of X/Seed Capital Management
Engineering and Information
Mary Maxon
Technology
University of Arkansas at Little Rock Initiative Lead
and STEP Board Marine Microbiology Initiative
Gordon and Betty Moore Foundation
Richard A. Bendis
David T. Morgenthaler
Founding President and CEO
Innovation America Founding Partner
Morgenthaler Ventures
Susan Hackwood
Edward E. Penhoet
Executive Director
California Council on Science and Director
Technology Alta Partners
William C. Harris Tyrone C. Taylor
President and CEO President
Science Foundation Arizona Capitol Advisors on Technology
W. Clark McFadden II
Partner
Dewey & LeBoeuf, LLP
*As of July 2009.
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PROJECT STAFF*
Charles W. Wessner Sujai J. Shivakumar
Study Director Senior Program Officer
Alan Anderson David E. Dierksheide
Consultant Program Officer
McAlister Clabaugh Adam H. Gertz
Program Officer Program Associate
(through June 2010)
David S. Dawson
Senior Program Assistant
*As of May 2011.
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For the National Research Council (NRC), this project was overseen by the
Board on Science, Technology and Economic Policy (STEP), a standing board of
the NRC established by the National Academies of Sciences and Engineering and
the Institute of Medicine in 1991. The mandate of the STEP Board is to integrate
understanding of scientific, technological, and economic elements in the for-
mulation of national policies to promote the economic well-being of the United
States. A distinctive characteristic of STEP’s approach is its frequent interactions
with public and private-sector decision makers. STEP bridges the disciplines of
business management, engineering, economics, and the social sciences to bring
diverse expertise to bear on pressing public policy questions. The members of the
STEP Board* and the NRC staff are listed below:
Edward E. Penhoet, Chair Amory Houghton, Jr.
Director Former Member of Congress
Alta Partners
David T. Morgenthaler
Lewis W. Coleman Founding Partner
President & CFO Morgenthaler Ventures
DreamWorks Animation
Joseph P. Newhouse
Alan M. Garber John D. MacArthur Professor of
Henry J. Kaiser, Jr. Professor Health Policy and Management
Professor of Medicine Harvard Medical School
Director, Center for Primary Care
Arati Prabhakar
and Outcomes Research
Stanford University General Partner
U.S. Venture Partners
Ralph E. Gomory
William J. Raduchel
Research Professor
Chairman
Stern School of Business
Opera Software ASA
New York University
and
Jack W. Schuler
President Emeritus
Partner
Alfred P. Sloan Foundation
Crabtree Partners
Mary L. Good
Alan Wm. Wolff
Donaghey University Professor
Of Counsel
Dean, Donaghey College of
Engineering and Information Dewey & LeBoeuf LLP
Technology
University of Arkansas at Little Rock
*As of May 2009.
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STEP STAFF*
Stephen A. Merrill Charles W. Wessner
Executive Director Program Director
Paul Beaton Adam H. Gertz
Program Officer Program Associate
(through June 2010)
McAlister Clabaugh
Daniel Mullins
Program Officer
Program Associate
David S. Dawson
Sujai J. Shivakumar
Senior Program Assistant
Senior Program Officer
David E. Dierksheide
Program Officer
*As of May 2011.
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Contents
PREFACE xv
I. OVERVIEW 1
A. Addressing the Renewable Energy Challenge 3
B. Regaining U.S. Leadership in Renewable Energy 7
C. Challenges for PV Manufacturing 11
D. Accelerating Innovation Through Collaborative Research 20
E. What Is the Role for Government? 31
F. Conclusion 35
II. PROCEEDINGS—APRIL 23, 2009, SYMPOSIUM,
THE FUTURE OF PHOTOVOLTAICS MANUFACTURING
37
IN THE UNITED STATES
Welcome 39
Charles Wessner, The National Academies
Introduction 41
Clark McFadden, Dewey & LeBoeuf LLP
Opening Remarks 43
John Lushetsky, U.S. Department of Energy
ix
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x CONTENTS
Panel I: Opportunities and Challenges Facing PV
Manufacturing in the United States 44
Moderator: Kevin Hurst, Office of Science and Technology
Policy, Executive Office of the President
First Solar, Inc. 45
Michael J. Ahearn, First Solar
The Global PV Value Chain 51
Dick Swanson, SunPower
Unleashing the Power of the Sun 54
Eric Peeters, Dow Corning Solar Solutions
Panel II: Opportunities and Challenges Facing PV
Manufacturing in the United States: Large
Companies’ Perspective 59
Moderator: Pete Engardio, BusinessWeek
PV Manufacturing in the United States 59
Eric Daniels, BP Solar
Applied Materials’ Perspective 63
Mark Pinto, Applied Materials
DuPont Reflections on Photovoltaics 67
Steven C. Freilich, E. I. du Pont de Nemours and Co.
Panel III: National and International Consortia:
Lessons and Best Practices 71
Moderator: Clark McFadden, Dewey & LeBoeuf LLP
Collaboration for Success in Semiconductors 71
John E. Kelly, IBM
Consortia in Europe: IMEC 75
Johan Van Helleputte, IMEC
Public-Private R&D Collaboration: Lessons from
PV Partnerships 79
Robert M. Margolis, National Renewable Energy Laboratory
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xi
CONTENTS
Panel IV: Economics of Photovoltaics in the United States 84
Moderator: Richard Bendis, Innovation America
Global Manufacturing of Photovoltaics: Where Does the
United States Stand? 84
Ken Zweibel, George Washington University
Financing Photovoltaics in the United States 88
Steve O’Rourke, Deutsche Bank Securities
The Toledo, Ohio, Solar Cluster 93
Norman Johnston, Solar Fields LLC, Calyxo GmbH,
and Ohio Advanced Energy (OAE)
Luncheon Remarks—
Transforming the Glass City into the Solar City:
Toledo’s Tradition of Innovation and Entrepreneurship 100
Congresswoman Marcy Kaptur (D-Ohio)
Panel V: Next Generation: The Flex Display Opportunity 106
Moderator: William Harris, Science Foundation Arizona
New and Synergistic Opportunities in Flexible and
Printed Electronics 106
Mark Hartney, FlexTech Alliance
Advancing Technology Through Measurement Science
at NIST 110
Eric K. Lin, National Institute of Standards and Technology
Flexible Electronics 112
Bob Street, Palo Alto Research Center
Panel VI: Roundtable Discussion—Key Issues and Next
Steps Forward 115
Moderator: Congresswoman Gabrielle Giffords (D-Arizona)
Jim Ryan, Joint School of Nanoscience and Nanoengineering,
Gateway University Research Park, Greensboro, North Carolina
Eric Daniels, BP Solar
Mark Pinto, Applied Materials
Richard Bendis, Innovation America
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xii CONTENTS
III. PROCEEDINGS—JULY 29, 2009, SYMPOSIUM,
STATE AND REGIONAL INNOVATION INITIATIVES—
PARTNERING FOR PHOTOVOLTAICS MANUFACTURING
123
IN THE UNITED STATES
Welcome 125
Charles Wessner, The National Academies
Introduction 127
Clark McFadden, Dewey & LeBoeuf LLP
Opening Remarks 129
Senator Mark Udall (D-Colorado)
Panel I: Partnering for Photovoltaic Technologies 132
Moderator: Congresswoman Gabrielle Giffords (D-Arizona)
U.S. Photovoltaic Roadmap: Perspective of the
Manufacturing Industry (1) 134
Subhendu Guha, United Solar Ovonic (Uni-Solar)
Perspective of the Manufacturing Industry (2) 137
David Eaglesham, First Solar
Panel II: Advancing Solar Technologies: The Department
of Energy 145
Moderator: Alicia Jackson, U.S. Senate Committee on Energy
& Natural Resources
The U.S. Department of Energy’s Perspective 145
Kristina Johnson, Under Secretary, U.S. Department
of Energy
DoE Solar Energy Technologies Program:
Accelerating the U.S. Solar Industry 151
John Lushetsky, Acting Deputy Assistant Secretary,
U.S. Department of Energy
Bringing Department of Energy Innovations to Market 155
Carol Battershell, Senior Advisor for Commercialization and
Deployment, Energy Efficiency and Renewable Energy,
U.S. Department of Energy
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xiii
CONTENTS
Panel III: Facilitating Solar Innovation: Contributions from
Other Federal Agencies 161
Moderator: Richard Bendis, Innovation America
Measurement and Standards: The Role of NIST 161
Kent Rochford, Acting Director, Electronics and Electrical
Engineering Laboratory, National Institute of Standards and
Technology (NIST)
The NSF Model: The Silicon Solar Consortium 164
Thomas W. Peterson, Assistant Director, NSF Directorate
of Engineering
Photovoltaic Manufacturing in the United States:
A University Perspective 168
James Sites, Colorado State University
Panel IV: Advances in Photovoltaic Manufacturing:
Intermediating Institutions 171
Moderator: Pete Engardio, BusinessWeek
A Solar Product Development Center 171
Stephen Empedocles, SVTC Solar
Industry-University Partnership for Photovoltaic
Technologies 175
Nolan Browne, MIT-Fraunhofer Center for Sustainable
Energy Systems
The SEMATECH Model: Potential Applications for PV 180
Michael Polcari, SEMATECH
The Semiconductor Research Corporation (SRC):
A Proven Means to Fund Relevant Research 184
Larry Sumney, Semiconductor Research Corporation
PV Technology Roadmaps and Industry Standards:
An Association’s Approach 189
Bettina Weiss, PV Group
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xiv CONTENTS
Panel V: Building a Solar PV Roadmap 194
Moderator: Clark McFadden, Dewey & LeBoeuf LLP
Building a Solar Roadmap 194
Ken Zweibel, George Washington University
Observations on Building a PV Roadmap Panel 198
Doug Rose, SunPower
Roundtable: Next Steps for Government-Industry
Collaboration in Photovoltaic Technologies 206
Moderator: John Lushetsky, U.S. Department of Energy
Doug Rose, SunPower
Charlie Gay, Applied Materials
Kevin Hutchings, IBM
John Gloekler, Apogee Solar
James Moreland, SolarWorld
IV. APPENDIXES 215
A. April 23, 2009, Symposium, The Future of Photovoltaics
Manufacturing in the United States: Biographies of Speakers
and Participants List 217
B. July 29, 2009, Symposium, State and Regional Innovation
Initiatives—Partnering for Photovoltaics Manufacturing
in the United States: Biographies of Speakers and
Participants List 239
C. Bibliography 261
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Preface
The global economy is characterized by increasing locational competition to
attract the resources necessary to develop leading-edge technologies as drivers of
regional and national growth. One means of facilitating such growth and improv -
ing competitiveness is to foster more robust innovation ecosystems through the
development of public-private partnerships, industry consortia, and other regional
and national economic development initiatives.
Many U.S. states and regions have developed programs to attract and grow
companies as well as attract the talent and resources necessary to develop a
knowledge-based economy. These state and regionally based initiatives have a
broad range of goals and, increasingly, include significant resources. They often
have a sector-based focus and, in many cases, are developed in partnership with
universities and private foundations.
However, there has been little or no recent analysis of the role of these in-
novation partnerships. Despite the growing importance and growth of state and
regional programs, relatively little is known about their goals, mechanisms,
funding levels, accomplishments, and complementarities with federal programs.
STATEMENT OF TASK
An ad hoc committee, under the auspices of the Board on Science, Technol -
ogy, and Economic Policy (STEP) is conducting a study of selected state and
regional programs in order to identify best practices with regard to their goals,
structures, instruments, modes of operation, synergies across private and public
programs, funding mechanisms and levels, and evaluation efforts. The committee
is reviewing selected state and regional efforts to capitalize on federal and state
xv
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xvi PREFACE
investments in areas of critical national needs. This review includes both efforts
to strengthen existing industries as well as specific new technology focus areas
such as nanotechnology, stem cells, and energy in order to gain an improved
understanding of program goals, challenges, and accomplishments.
THE CONTEXT OF THIS REPORT
Since 1991, the National Research Council, under the auspices of the Board
on Science, Technology, and Economic Policy, has undertaken a program of
activities to improve policymakers’ understandings of the interconnections of
science, technology, and economic policy and their importance for the American
economy and its international competitive position. The Board’s activities have
corresponded with increased policy recognition of the importance of knowledge
and technology to economic growth. New Growth Theory in economics also em-
phasizes the role of technology creation as a driver of local and regional growth. 1
Recent economic analysis also suggests that high technology is often char-
acterized by increasing rather than decreasing returns, justifying to some the
proposition that governments can capture long-term advantage in key industries
by providing relatively small, but potentially decisive support to bring regionally
based industries up the learning curve and down the cost curve. In part, this is
why the literature now recognizes the relationship between technology policy
and trade policy.2 Recognition of these linkages and the corresponding ability of
governments to shift comparative advantage in favor of the state, regional, and
national economy provide the intellectual underpinning for government support
at all levels for high-technology industry.
STEP seeks to bring new insight to bear on issues of national interest though
its analyses of specific industries and technologies.3 The Board’s research ad-
dresses both demand and supply side realities, the contribution of R&D partner-
ships, and efforts to enhance U.S. competitiveness. This approach is of particular
relevance to current initiatives to create and/or reinforce clusters of firms able to
1 Developed in the 1990s, New Growth theories highlight the role of innovation as the main driver
for economic development, with the implication that policies that embrace openness, competition,
change and innovation will promote growth. See Paul M. Romer, “Endogenous technological change,”
Journal of Political Economy October 1990. Also see Gene M. Grossman and Elhanan Helpman,
“Endogenous innovation in the theory of growth,” The Journal of Economic Perspectives 8(1):23–44,
1994.
2 J. A. Brander and B. J. Spencer, “International R&D rivalry and industrial strategy,” Review of
Economic Studies 50:707–722, 1983, and “Export strategies and international market share rivalry,”
Journal of International Economics 16:83–100, 1985.
3 National Research Council, Innovation in Global Industries: U.S. Firms Competing in a New
World, J. Macher and D. Mowery, eds., Washington D.C.: The National Academies Press, 2008. This
report follows a previous review of U.S. industrial performance by STEP. See National Research
Council, U.S. Industry in 2000: Studies in Competitive Performance, D. Mowery, ed., Washington,
D.C.: National Academy Press, 1999.
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xvii
PREFACE
meet new needs and contribute to improved U.S. competitiveness and the creation
of high-value employment in the United States.4
Public-private partnerships are increasingly recognized as important ele-
ments for the support of innovation-led growth because of their contribution to
the commercialization of state and national investments in research and develop -
ment. As documented by recent National Research Council analysis, technology
partnerships can be critical to generating an environment supportive of technolo -
gies that can have economic benefits with regional and national impact. 5
One important element of STEP’s analysis concerns the growth and impact
of foreign technology programs.6 U.S. competitors have launched substantial
programs to support new technologies, small firm development, and consortia
among large and small firms to strengthen national and regional positions in stra -
tegic sectors. Some governments overseas have chosen to provide public support
to innovation to overcome the market imperfections apparent in their national
innovation systems.7 They believe that the rising costs and risks associated with
new potentially high-payoff technologies, and the growing global dispersal of
technical expertise, underscore the need for national R&D programs to support
new and existing high-technology firms within their borders.
Similarly, many state and local governments and regional entities in the
United States are undertaking a variety of initiatives to enhance local economic
development and employment through investment programs designed to attract
and grow knowledge-based industries.8 These state and regional programs and
associated policy measures are of great interest for their potential impact on U.S.
competitiveness.
STEP’s project on State and Regional Innovation Initiatives is intended to
generate a better understanding of the challenges associated with the transition of
research into products, the practices associated with successful state and regional
programs, and their interaction with federal programs and private initiatives. The
project seeks to achieve this goal through a series of complementary assessments
4 See Charles W. Wessner, Growing Innovation Clusters for American Prosperity , Washington,
D.C.: The National Academies Press, forthcoming. See also Karen G. Mills, Elisabeth B. Reynolds,
and Andrew Reamer, Clusters and Competitiveness: A New Federal Role for Stimulating Regional
Economies, Washington, D.C.: Brookings, April 2008.
5 National Research Council, Government-Industry Partnerships for the Development of New Tech-
nologies, Charles W. Wessner, ed., Washington, D.C.: The National Academies Press, 2003.
6 National Research Council, Innovation Policies for the 21st Century, Charles W. Wessner, ed.,
Washington, D.C.: The National Academies Press, 2007.
7 Most notably, a number of countries are investing significant funds in the development of research
parks. For a review of selected national efforts, see National Research Council, Understanding Re-
search, Science and Technology Parks: Global Best Practices, Charles W. Wessner, ed., Washington,
D.C.: The National Academies Press, 2009.
8 For a scoreboard of state efforts, see Robert Atkinson and Scott Andes, The 2008 State New
Economy Index: Benchmarking Economic Transformation in the States, Kauffman Foundation and
ITIF, November 2008.
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xviii PREFACE
of state, regional, and federal initiatives; analyses of specific industries and tech -
nologies from the perspective of crafting supportive public policy at all three
levels; and outreach to multiple stakeholders. The overall goal is to improve the
operation of state and regional programs and, collectively, enhance their impact.
STEP MEETINGS ON PHOTOVOLTAIC MANUFACTURING
Gathering representatives from leading producers of photovoltaics, congres -
sional staff, leading academics and industry analysts, and representatives from
relevant government agencies, STEP convened two meetings, held in April and
July 2009, to examine the future of the U.S. photovoltaic industry and the practi -
cal steps that the federal government and some state and regional governments
are taking to develop the capacity to manufacture photovoltaics competitively.
Drawing on the experiences of related industries, meeting participants explored
the prospects for cooperative R&D efforts, standards, and roadmapping efforts
that could accelerate innovation and growth of a U.S. photovoltaics industry.
This report captures the presentations and discussions of these two symposia
on the future of photovoltaic manufacturing. It includes a common introduction
and summaries of the presentations at both meetings. This workshop summary
has been prepared by the workshop rapporteur as a factual summary of what oc -
curred at the workshops. The planning committee’s role was limited to planning
and convening the workshops. The statements made are those of the rapporteur
or individual workshop participants and do not necessarily represent the views of
all workshop participants, the planning committee, or the National Academies.
ACKNOWLEDGMENTS
On behalf of the National Academies, we express our appreciation and
recognition for the insights, experiences, and perspectives made available by the
participants of the meetings. We are also grateful to John Lushetsky of the Depart-
ment of Energy, John Fernandez of the Economic Development Administration,
Marc Stanley of the Technology Innovation Program of the National Institute of
Standards and Technology, and Christina Gabriel of The Heinz Endowments for
their interest and support of this project.9
We are indebted to Alan Anderson for his preparation of the meeting summa-
ries. Sujai Shivakumar prepared the draft introduction to this volume and David
Dierksheide prepared the report manuscript for publication.
9 As of July 2009.
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xix
PREFACE
NATIONAL RESEARCH COUNCIL REVIEW
This report has been reviewed in draft form by individuals chosen for their
diverse perspectives and technical expertise, in accordance with procedures ap-
proved by the National Academies’ Report Review Committee. The purpose
of this independent review is to provide candid and critical comments that will
assist the institution in making its published report as sound as possible and to
ensure that the report meets institutional standards for quality and objectivity.
The review comments and draft manuscript remain confidential to protect the
integrity of the process.
I wish to thank the following individuals for their review of this report:
Nancy Bacon, United Solar Ovonic and Energy Conversion Devices, Inc.; Robert
Collins, University of Toledo; Stephanie Shipp, Institute for Defense Analysis;
Richard Swanson, SunPower; and Cyris Wadia, Haas School.
Although the reviewers listed above have provided many constructive com-
ments and suggestions, they were not asked to endorse the content of the report,
nor did they see the final draft before its release. Responsibility for the final con -
tent of this report rests entirely with the author and the institution.
Charles W. Wessner
Rapporteur
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