10 January 2008

Solar Power advances

By Jim Pinto

More than 3,000 megawatts of solar-powered electricity is generated in the world today. World production of photo-voltaic cells grew 32% from 2002 to 2003, with more growth expected this year. It took 30 years (1969-99) to produce the first gigawatt (billion watts) of solar-power. Total production has tripled since then.

In 2003, the solar power industry generated $5.2 billion in revenue. With scientific breakthroughs coming and production costs dropping fast, solar energy should surge significantly in the next decade.

Until now, Japan, Germany and California have been the three largest solar markets because of subsidies that rebate about half of the cost of a solar installation. The annual growth rate of solar power is highest in Japan (45%) and Europe (43%), where government programs help residents buy rooftop units. In Japan, the cost of solar-power has dropped to a level that nearly matches traditional sources. Even individual households that use solar technology can sell excess electricity back to their utilities for higher-than-market prices.

Solar-power is clean. It eliminates air pollution, greenhouse gas emissions, coal or radioactive wastes. It is silent, and mostly unseen, since solar-power systems can go up in densely populated areas. There are no fuel costs and little or no maintenance.

Unfortunately, without subsidies, solar-generated electricity is still about 10 times more expensive than equivalent power from old coal-fired plants; 4 times more than natural gas; twice as much as nuclear; and 3 or 4 times as much as wind energy. But technology is bringing prices down very quickly.

The photo-voltaic cells used for generating solar energy in the past were expensive, rigid silicon chips. Only techno-snobs were willing to show off the ugly roof-racks. Today's thin-film solar-cells can be sprayed by ink-jet nozzles in precise patterns onto sheets of plastic or roof tiles. Not only does this cut costs, but the obtrusive arrays are gone.

There is no real infrastructure to encourage the use of solar power, which inhibits its wider use. And many people would rather flip a switch, than buy their own equipment to generate their own power and learn the confusing technicalities. But solar power will become much more user-friendly, practical and economical in the decade ahead.

Generating your own, independent power suddenly becomes interesting. And as technology and increased production brings down prices, and as the cost of traditional electricity rises, solar power is becoming increasingly attractive.

The fast growing solar power markets are attracting venture capitalists to fund startups. A lot of VC funding is moving into solar energy products. Worldwide, 6 companies raised $64 million of VC money in 1999; 22 companies received $114 million in 2001, and 26 companies got $277 million in 2003. The VC bets should top $500 million this year.

Nanotech is coming on the scene, with Nanosys of Palo Alto working on sprayable solar coatings for roofs, and Nanostellar looking to produce cleaner, cheaper catalytic converters.

Related links:

• Chemical & Engineering News – Power from the Sun:
  http://pubs.acs.org/cen/coverstory/8225/8225solarenergy.html
•  Some good links on the American Energy Independence website:
  http://www.americanenergyindependence.com/
•  GE Energy – Solar Power:
  http://www.gepower.com/prod_serv/products/solar/en/index.htm

Behind the byline
Jim Pinto is an industry analyst and founder of Action Instruments. You can e-mail him at jim@jimpinto.com or view his writings at www.JimPinto.com. Read the Table of Contents of his book, Pinto’s Points, at www.jimpinto.com/writings/points.html.