Solar Energy Poised to Go Mainstream, Say Researchers

SAN FRANCISCO, May 24 (OneWorld) - Solar power is the fastest growing source of energy in the world and likely will become much more affordable in the next few years, according to a new report out this week.

"As production costs fall, technologies continue to advance, and supply and demand come into balance," the report reads, "[solar power] prices will fall more than 40 percent in the next three years relative to prices in late 2006. Such a decline would make solar electricity far more affordable in markets across the globe."

Additionally, China's strong entry in the field could drive prices down even further, the report's authors predict.

Already, global production of solar photovoltaic (PV) cells, which turn sunlight directly into electricity, has risen six-fold since 2000 and grew 41 percent in 2006 alone, says the report from the Washington, DC-based Worldwatch Institute and the Prometheus Institute in Cambridge, Massachusetts. That makes solar power the world's fastest growing energy source, though grid-connected solar capacity still makes up less than 1 percent of the world market.

"Today, high cost is the largest barrier, but this is a temporary challenge," said Worldwatch's Janet Sawin, who authored the report.

The growth of solar power has been fastest in Japan and Germany, the report notes. Sawin said that's no accident. Those countries, she told OneWorld, have enacted laws friendly to solar power, which is generated without emitting carbon dioxide or other significant pollutants.

In Germany a law guarantees that owners of solar panels get a fixed price when they produce more solar energy than they consume and sell the excess back to the national electricity grid. In Spain, ordinances require "that new and renovated buildings include solar [power]."

Researchers said the biggest surprise in the report was the dramatic growth in PV production in China. Last year, China passed the United States, which first developed modern solar cell technology at Bell Labs in New Jersey in the 1950s, to become the world's third-largest producer of the cells -- trailing only Germany and Japan.

"To say that Chinese PV producers plan to expand production rapidly in the year ahead would be an understatement," Travis Bradford, president of the Prometheus Institute, said in a statement. "They have raised billions [of dollars] from international [initial public offerings (IPOs) of stock] to build capacity and increase scale with the goal of driving down costs. Four Chinese IPOs are expected to come to market this month alone."

Most of the solar panels manufactured in China are made for export, according to Sawin. "China is applying its world-leading skills at low-cost light manufacturing of devices such as televisions and computers to the solar industry."

Sawin said that China, with its growing need for energy, large work force, and strong industrial base, could drive dramatic reductions in PV prices in the next few years, helping to make solar energy prices competitive with conventional power even without subsidies.

Solar energy has already dramatically improved living conditions for some 100,000 people in rural India.

In the country where millions supplement a sparse and unreliable electricity grid with kerosene lighting, which is responsible for untold pollution-related deaths and disabilities each year, roof-installed solar panels have offered a clean energy alternative to run a small fan, radio, or television, and a few lights for working or reading.

A UN-sponsored program has encouraged banks in the southern Indian state of Karnataka to finance small loans for the solar systems -- typically $300 to $500 for a system to power two to four small lights or appliances.

The UN credits the solar panels with "better grades for schoolchildren, better productivity for needlework artisan groups and other cottage industries, and even better sales at fruit stands, where produce is no longer spoiled by fumes from kerosene lamps."

The India project has been so successful that similar solar energy programs are being initiated in Algeria, China, Egypt, Ghana, Indonesia, and Mexico, the UN said.

But in the United States, growth has not taken off. The Worldwatch report said only 202 megawatts of solar electricity were produced in the United States last year -- less power than a single coal or natural gas plant.

The legal atmosphere in the United States remains largely hostile to solar power, Worldwatch's Sawin said.

"Many homeowner associations forbid them," she said, and while a handful of states have adopted "net metering" laws, encouraging the use of solar power by allowing customers to run their electricity meters backwards when they feed the power their solar panels generate back into the grid, most states have not.

"There is no state in which customers are paid the full value of the power they generate with PV and feed into the grid," Sawin added, noting that solar panels produce the most electricity on hot days when demand is highest and conventional electricity is the most expensive.

Still, she remains optimistic about solar energy's future.

"The conventional energy industry will be surprised by how quickly solar PV becomes mainstream -- cheap enough to provide carbon-free electricity on rooftops, while also meeting the energy needs of hundreds of millions of poor people who currently lack electricity," she said.