US awakens to solar revolution Green dollars awash

Houston Solar panels may not adorn every rooftop but governments globally could finally be giving the industry the fresh impetus needed for it to fulfil its potential.

In spite of record growth, rates over the past five years, high costs (solar energy can be four times as expensive as traditional gas-fired electricity) and the economic downturn mean solar has not become a mainstream energy source.

While many solar companies were profitable before the economic downturn, boosted by government subsidies, the credit squeeze and fall in energy demand has hit them along with the rest of the power sector.

This has led some component prices to drop, which has heaped pressure on margins at many manufacturers.

Germany, Japan and Spain lead the market, mainly because their governments took an early lead in pushing the technology's development and, as a result, the industry is led mostly by European companies.

Germany's Q-Cells is the world's largest solar cell manufacturer, while Abengoa Solar, a Spanish company, this year built the world's largest solar tower, delivering electricity to 10,000 homes.

However, China and the United States are making a concerted effort to make up for lost time. China is already the world's biggest producer of solar panels but exports 90 per cent of the equipment. Many in the industry also expect the United States to overtake its rivals shortly following increased attention from Washington.

Globally, Jeff Smidt, general manager of Underwriters Laboratories global energy business, says solar submissions for the seal of approval from the safety certification and testing organisation is on the rise, particularly from Chinese makers.

"We're seeing a huge increase in solar panels submitted for our evaluation,'' Smidt says.

China is building its first commercial solar power station, which sparked interest from companies globally looking to bid for contracts.

However, the United States, following its $787 billion (Dh2.8 trillion) economic stimulus package, which includes grants and tax breaks for US clean energy projects over the next 10 years, has attracted the most attention.

"Most manufacturers around the world see the United States as the next big thing for solar," Smidt said.

A recent report by Pike Research, the clean technology research group, says the United States could well lead the solar industry by 2014. It is currently the fourth largest, behind Germany, Spain and Japan.

In anticipation of a boom there, a string of companies have in the past year moved into the United States.

SolarWorld, a German group, invested $500 million in a solar-powered manufacturing plant in Oregon. SolarWorld combines all stages of the solar photovoltaic (PV) value chain, from the raw material silicon to solar power plants.

Fotowatio, one of Spain's largest independent solar power producers, agreed to buy the key US solar power assets, including the biggest US solar photovoltaic installation, at Nellis Air Force Base, from MMA Renewable Ventures of California.

Furthermore, Japan's Itochu acquired 85 per cent of the shares of SolarNet, a solar photovoltaic system integrator.

The concept of solar panels was developed in 1861 by Auguste Mouchout, who invented the first solar motor. In 1953, Bell Laboratories (now AT&T) created the first silicon solar cell able to generate an electric current to many high hopes.

The 1970s oil embargo sparked intense interest in the energy source.

Solar is now used in a variety of ways. Photovoltaics converts sunlight into electricity and solar thermal absorbs the sun's energy to provide low-temperature heat to create hot water or space heating.

Concentrating solar power uses reflective materials in utility-sized systems to concentrate the sun's heat to warm a synthetic liquid, which heats water to power steam turbines and produce electricity.

In addition, passive solar is used by architects to direct sunlight to brighten buildings and sometimes involves building with special materials that absorb the sun's heat to be released later to warm during cooler evenings.

- Financial Times

San Francisco (Reuters) The US green technology sector, which suffered a drop in funding early this year, is seeing renewed interest with venture dollars flowing in once again to promising start-ups and some firms looking to resurrect public offerings that had been set aside.

Investment is seen shifting from capital-intensive energy generating technologies, such as solar and wind, to those associated with energy storage, transportation and efficiency.

Bets are being placed on lithium-ion battery makers and start-ups in the smart grid sector offering a range of possibilities from helping electric utilities operate systems more efficiently to helping consumers control energy use.

Smart grid technologies aim to make the existing power grid more efficient and reliable.

"Six to nine months ago, people were putting the brakes on everything," said Gary Vollen, managing director of Robert W Baird & Co's clean technology investment banking. "I don't think we are in that condition these days."

Industry experts are expecting the appetite for investments in green technologies, sometimes referred to as cleantech, to see a significant pickup as early as this autumn, with continued improvement through 2010.

However, they caution that the level of activity is unlikely to reach the $2.6 billion (Dh9.54 billion) peak seen in the third quarter of 2008.

"I would expect to see a meaningful increase in cleantech investment over the course of the next six months," said Tim Carey, head of PriceWaterHouseCoopers' clean technology group.