Solar equipment manufacturers have been chasing the same goal for decades: producing a cheaper kilowatt of electricity. Now, after years of unfulfilled hopes, experts say that the solar picture is finally improving.
New technology is being developed in solar photovoltaic (PV) systems. And, more important, investors seem to be taking the advice of none other than Thomas Edison, the legendary inventor who famously exclaimed: "I'd put my money on the sun and solar energy."
Many decades later, venture capitalists are heeding that call.
"Conditions have never been better because electricity prices are going up. The basic challenges with solar energy haven't gone away (since the 1970s) but clearly advances in material science, the economic conditions we're facing, and environmental mandates are all making solar much more attractive," said William Lese, managing director of venture capital firm Braemar Energy Ventures.
The surge in venture capital activity dovetails with the growing interest overall in. "It's not like the Internet boom of the late 1990s, but there's a clear understanding that this is a market that is about to take off," said Steve Chadima, chief marketing officer at Energy Innovations, a manufacturer of energy systems spun off from incubator Idealab.
Although still a fraction of overall energy industry, use of solar PV goods--products that convert light to electricity--saw rapid growth last year. The total market, which includes components and installation services, grew more than 50 percent in 2005, according to Clean Edge, a clean energy research firm.
Brighterhave set off a race to manufacture more efficient solar panels, which will improve the cost per kilowatt for consumers. Solar PV systems are still substantially more expensive than purchasing electricity generated from fossil fuels or nuclear power, according to industry experts.
The high cost of silicon, the material that converts light to electricity in most solar panels today, is one of the biggest barriers to lowering the cost of solar PV systems, said solar company executives.
"The industry is capacity constrained for the foreseeable future," said Richard Chleboski, vice president of worldwide expansion at Evergreen Solar, who spoke at a recent Piper Jaffray conference on the solar industry. "Technology is really key in this industry because it's a necessary component to create cost reductions."
Going beyond silicon
Established solar providers are betting that increased silicon capacity and improved manufacturing will make solar electricity more affordable and stoke more demand. But several smaller companies are taking widely varying routes with the same goal in mind.
Many companies are investing in advanced manufacturing techniques that cut down on the amount of silicon required to make a panel. Evergreen Solar, for example, has devised a "string ribbon" production method which it says reduces silicon waste and boosts the efficiency of panels, thus lowering the overall system costs.
Silicon-based solar panels dominate the market. But several smaller companies are challenging the incumbents with solar cells built from materials other than silicon.
"There are questions marks around the type of efficiency (thin film technology) can get and the longevity of the cells. But these companies are moving forward rapidly, beyond the R&D stage and into production," said Ron Pernick, principal of Clean Edge.
Another approach is, where solar panels are equipped with mirrors to focus the sun rays on a photovoltaic cell to make them more productive at creating electricity. These products could be used to supplement the power of a large warehouse or retail outlet, for example.
Energy Innovations, SolFocus, Solaria and Pacific SolarTech are working on concentrators. These systems are being pilot-tested, and the companies are expected to commercialize their products over the next year.
Another notable nonsilicon solar company is Stirling Energy Systems. It is constructing in the California desert to generate electricity. It expects to deliver on its to build facilities that generate hundreds of megawatts of power in late 2008, said Stirling CEO Bruce Osborn.
Konarka, which recently raised anin venture funding, is pursuing organic photovoltaics, where solar cells are made from plastics.
Although still in development, this process of "printing" organic solar cells results in flexible strips which can be used for a wide range of applications, from solar-powered cell phones to portable Army structures covered in photovoltaic material, according to the company.
"If you want to dramatically lower the price of PV, it's not about scavenging the last piece of silicon. It's about changing the manufacturing process," Konarka CEO Howard Berke said at the Piper Jaffray conference earlier this month.