The worldwide demand for energy continues to grow while at the same time, environmental concerns have put pressure on traditional sources such as fossil fuels. As governments and individuals seek a balance between these two conflicting needs, alternative energy companies are finding themselves in the spotlight.

Many say one of the most popular energy sources for electricity will be solar power, whether for large-scale solar power stations or distributed energy applications at community levels. Solar energy uses no resources to speak of, emits no pollution and is immune to energy price hikes.

Examples of solar technologies being developed today are photovoltaic cells (pictured right), which convert sunlight directly into electricity and are made of semiconductors such as crystalline silicon or various thin-film materials; concentrating solar power (CSP) technologies, which use reflective materials to concentrate the sun’s heat energy to ultimately drive an electricity-producing generator; and low-temperature solar collectors, which also absorb the sun’s heat energy.

Photovoltaics can provide tiny amounts of power for watches, large amounts for the electric grid and much in between. CSP technologies include dish/engine systems, parabolic troughs and central power towers. Low-temperature solar collectors absorb the sun’s heat energy, but the heat is used directly for hot water or space heating for residential, commercial and industrial facilities.

Proponents and detractors of solar power continue their debate every day. However, it’s the researchers, engineers, businesses, installers and buyers who really contribute to the argument over how powerful a force solar power could be in tomorrow’s economy.

Solar power use is expected to grow 40 percent a year through 2011, according to a Royal Bank of Canada (RBC) Capital Markets report, which was released in May (via InvestmentNews.com). The report projected 2007 profits for the industry of $7.7 billion, rising to $11.5 billion by 2011.

Yet utility bosses, policymakers and many businesses tend to dismiss solar power and other alternatives as noble but expensive distractions, sustainable only through lavish subsidies. After all, solar power installation isn’t cheap, which is one of the main reasons it hasn’t cracked the mainstream. Many of today’s commercially available solar cells are made from silicon, which makes them expensive and less competitive compared with other sources of energy, such as coal.

Indeed, it takes a serious upfront investment. Photovoltaic panels hit the wallet hard, but a slew of tax breaks can pay for a notable percentage of the cost; for instance, you could get a 3-kilowatt system for about $10,000. It pays for several months of power per year, and the energy it feeds into the grid gets subtracted from your electricity bill.

However, as energy prices increase, consumers are getting this back increasingly quicker. Worldwide, the cost of converting sunlight to electricity is rapidly decreasing.

According to a Royal Bank of Canada (RBC) Capital Markets report, the average cost for installed photovoltaic solar power will fall to $4.40 per kilowatt in 2011, from an estimated $7.37 this year. Solar power will be competitive with grid power at about $3.50 per kilowatt, a price it should attain between 2012 and 2014, depending on the region and government incentives.

“Within 10 years photovoltaic power will be competitive in price with traditional sources of electricity,” according to the U.S. Department of Energy (DOE). And Engineering News recently noted that the next generation of solar cells “will be light, flexible, attractive and, most importantly, cheap, because they will be made from organic (plastic) materials.”

For decades, researchers have worked to increase efficiency of solar panels. But because the progress has been painfully slow, scientists have taken different paths to converting sunlight into electricity.

For example, late last year DOE Assistant Secretary for Energy Efficiency and Renewable Energy Alexander Karsner announced that with DOE funding, a concentrator solar cell produced by Boeing-Spectrolab had recently achieved a world-record conversion efficiency of 40.7 percent, “establishing a new milestone in sunlight-to-electricity performance.”

The DOE said this breakthrough “may lead to systems with an installation cost of only $3 per watt, producing electricity at a cost of 8-10 cents per kilowatt/hour, making solar electricity a more cost-competitive and integral part of our nation’s energy mix,” reported SolarBuzz.com.

Two major issues associated with solar is storage and transport of the energy. On this, Engineering News points to Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) for one example of a potential solution to the transport and storage of solar problem.

According to Engineering News:

The CSIRO is developing the technology to combine solar energy with natural gas […] The resulting product, SolarGas, embodies about 25% solar energy in the chemical bonds. This means solar energy can be stored and transported […] Solar-enhanced fossil fuels can be exported, and represent a transitional route to much larger contributions of solar energy to the energy mix.

If the Solar Energy Research and Advancement Act of 2007, H.R. 2774 bill, introduced last month, passes through Congress, it would instruct the Secretary to establish an R&D program on “thermal energy storage technologies for concentrating solar power.” One section authorizes appropriations of $5 million in fiscal year 2008, $7 million in fiscal year 2009, $9 million in fiscal year 2010, $10.5 million in fiscal year 2011, and $12 million in fiscal year 2012. The bill also would authorize $10 million for a Solar Energy Curriculum Development and Certification grant program in each fiscal year from FY08 through FY12.

(Governments in many developed nations are pushing subsidies to stimulate demand, as well as innovation, in this field. For instance, householders, schools and community organizations planning to take advantage of the Australian government’s new $150 million solar power rebate can apply immediately for the increased rebate.)

For now, gutsy companies with money to spend across globe have installed solar panels. Google has launched the largest solar panel installation to date on a corporate campus in the U.S. It has installed more than 90 percent of the 9,212 solar panels that comprise the 1,600-kilowatt project, which is expected to produce 30 percent of Google’s peak electricity demand in its solar-powered buildings at the Mountain View, Calif., headquarters.

Google expects to save “close to $15 million over the 30-year lifespan of its system,” according to RenewableEnergyAccess.com. Payback period: 7.5 years.

Consumers, too, are moving along with installing solar panels and other green technologies.

Photovoltaic solar panels on the roof of a house near Boston, Mass.
Credit: Wikipedia

According to The Associated Press (via CommercialAppeal.com), “Off-the-grid living is edging into the American mainstream. It isn’t there yet, but about 180,000 homes, mostly in the West, operate on it.” Much of the growth is in California, but off-the-grid living is also growing in Texas, New Jersey and Wisconsin.

Most of the homeowners’ solar panels “easily handle their computers, lights, large-screen televisions, microwave ovens, refrigerator-freezers and more.”

“It pretty much tracks where the best rebates are” for the cost of the equipment, Connie Said of Home Power told AP.

The long-term outlook for the solar-power sector appears positive, though stocks of companies in the sector are expected to “remain volatile in the near term,” according to the RBC Capital Markets report. Consolidation is likely among installers of independent solar-power systems, smaller cell and module makers, and producers of silicon, the report said.

Resources

U.S. Dept. of Energy: Solar

Here comes the sun: investors moving into rapidly expanding solar power industry
RBC Capital Market, May 9, 2007

Solar: Long-Term Gains Outweigh Upfront Costs
by John Darling
The Mail Tribune, July 5, 2007

New Comprehensive Overview of World Industrial Energy Efficiency and CO2 Intensity
International Energy Agency, June 25, 2007

Sun Will Shine on Solar-Energy Investing, Report Says
by Liz Skinner
InvestmentNews.com, June 18, 2007

Solar Energy Research and Advancement Act of 2007
U.S. House of Representatives Science & Technology Committee, June 19, 2007

Washington, DC, USA: Department of Energy Announces 40% Efficient Concentrator Solar Cell
SolarBuzz.com, Dec. 6, 2006

Successful Green Energy Conference in Pasadena Highlighted Significant New Technologies
GreenTech 2007 (via Business Wire), June 15, 2007

Google Solar Panel Project

Google Powers Up 1.6 MW Solar System & Hybrid Initiative
by Meghan Murphy
RenewableEnergyAccess.com, June 20, 2007

An Increasing Number of Homeowners Are Going ‘Off Grid’
by Joseph B. Frazier
The Associated Press (via CommercialAppeal.com), June 20, 2007

Solar Energy – How the Aussies Go About It
by Karel Smrcka
Engineering News, July 6, 2007