Change Alley

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Solar Revolution Running Out Of Steam?

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It’s a good job someone’s looking at increasing the supply of silicon for the solar industry (“IBM Recycles Silicon”) . In his article “Profit from the End of Cheap Oil“, Ian Cooper describes how the hopes of the solar industry to provide a viable energy alternative to oil depend on a reliable and continuing supply of polysilicon. At $70 per kilogram, the price of polysilicon has doubled since 2004. Very few solar companies world-wide have the resources to meet an insatiable demand for panels, so they have started investing in polysilicon manufacturers to fund the construction of new facilities and increase output.

Without solar panels, there’s no solar power. The industry is dead in the water. All the current activity in the solar sector will grind to a halt.

Face it. Strong global demand for solar isn’t going to slow in the face of $95 oil . . . and there’s plenty to get excited about thanks to China’s insatiable demand ahead of the Summer 2008 Olympics, and the United States’ solar energy plans:

· George W. Bush has announced plans to increase federal government spending on solar energy to $150 million.

· California’s Governor Schwarzenegger has pledged a million solar rooftops by 2017.

· And New York’s Governor George Pataki has inked a bill offering a $5,000 tax credit to homeowners who install solar-power roofing.

· Add to this the Chinese parliament’s plans to convert 10% of the country’s energy consumption to renewable energy sources by 2020, including the use of solar-generated electricity and solar water heating, and you’ve got an emerging industry with only a select few players for all the wealth to flow to.

Small wonder that there’s a “feeding frenzy” going on in the solar industry. Whether this bubble will burst depends on the supply of raw materials and the future development of alternative technologies which might change the industry beyond recognition.

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Written by Pete Smith

November 15, 2007 at 2:28 pm

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