Solar power markets boom.

• Author: Flavin, Christopher

The energy companies of the future are shouting the news of renewable energy from the rooftops.

In June 1998, Oguz Capan, president of Turkey's ROC Oil Company, visited the Worldwatch Institute's offices in Washington. The purpose of his visit was surprising: low oil prices and a stow market had persuaded him to sell his small petroleum production business and invest the proceeds in wind and solar energy, enterprises that hardly exist in Turkey today. But Capan was optimistic. These new energy sources, he told us, will be far more profitable than oil. He wanted to know what we could tell him about how the new technologies are performing around the world.

Capan's timing may be propitious, because recent developments may soon allow solar energy to join computer software and biotechnology as a leading growth industry.(1) Last year, sales of solar photovoltaic (PV) cells expanded 42 percent, a rate of growth that would be more familiar to Microsoft or Sun than to Exxon or Shell [ILLUSTRATION FOR FIGURE 1 OMITTED].

That spurt gave the solar industry a fourth straight year of double-digit growth. "We are seeing PV change from a cottage industry into a profitable business worldwide," says Ken Zweibel of the U.S. National Renewable Energy, Laboratory (NREL). "Today, you can sell anything that you can make." By "anything," Zweibel is referring to the small silicon cells that form the technical basis of this business, and for which suppliers this year are having to scramble to keep up with demand.

Touted for more than two decades as an eventual replacement for fossil fuels, solar power has - until now - failed to make the commercial leaps needed to challenge conventional energy technologies. Made of silicon semiconductors closely related to those found in computers (much of the silicon used for solar cells is actually waste from the electronics industry), solar cells are one of the newest and most advanced energy technologies in use today.

Invented in the 1950s, and first deployed in the U.S. space program, solar cells accomplish a feat of near-alchemy - turning solar rays directly into electric current, without benefit of fuel, mechanical turbine, or generator. As early as 1957, Business Week was rhapsodizing about the potential of solar power, envisioning a solar car in which "riders sit comfortably in the back seat and perhaps watch solar-powered TV." Although solar power has a long way to go to overtake fossil fuels, thousands of people already have solar powered TVs and thousands of others have solar cells built into the sunroofs of their cars - powering fans that keep them cool.

Roughly half of the world market for PVs last year was in non-residential applications such as portable highway signals, radios, telecommunications repeater stations, and water pumps, where the only alternatives are high-cost diesel generators. Another 20 percent is used in small consumer devices such as calculators and watches. Unlike most energy technologies, photovoltaics are lightweight, modular, and can be used economically in such devices.

The current boom in solar energy is being driven by a previously neglected small-scale application: providing power for individual houses one at a time, which accounts for most of the remaining 30 percent of the market. From tiny huts in rural areas of the Dominican Republic to trim suburban homes in Osaka, Japan, some 500,000 homeowners are now generating their own power.

Since 1980, the price of solar cells has fallen by 80 percent, as the technology has...