New System Could Cut Solar Costs

Since the State of the Union, there have been more stories about alternative energy sources. The current administration is still in denial when it comes to global warming and other environmental issues, but at least they have made an effort on alternative energy. It shows what leadership at the national level can do. Luckily, California is even further ahead, and aiming higher than Bush and Company. One can only imagine where we would be if the Supreme Court had not intervened, and Al Gore became our President.

Personally, I prefer more aggressive measures to promote conservation.

From the San Jose Mercury News:

A new solar energy system devised by entrepreneurs in a Silicon Valley garage could cut the cost of solar power in commercial buildings by at least half, Xerox's Palo Alto Research Center is expected to announce today.

The entrepreneurs' start-up, SolFocus in Palo Alto, partnered with PARC to create the technology, scheduled to begin production this year. The first version cuts the cost of power per watt of energy by as much as half, said Gary Conley, chief executive of SolFocus. A more advanced version will be commercially available in two to three years, and save even more money, he said.

The technology, known as CPV for Concentrator Photovoltaic, essentially uses cheap lenses and mirrors to concentrate sunlight on a small, heat-tolerant silicon chip. Because the CPVs focus so much energy in one place, they don't need nearly as much silicon material as normal solar cells, which sit in rows upon large solar panels placed on rooftops. The new technology also collects and stores sunlight more efficiently, Conley said.

``We are harvesting sunlight with mirrors,'' Conley said.

The fact that the technology uses less Silicon, is a big deal as well:

Almost all solar panels are made with silicon -- and makers can't buy enough of it

Sometimes it's possible to be a little too successful. The solar power industry has been on a tear, growing at more than 30% per year for the last six years. It's poised to reach a surprising milestone within two years, when it will gobble up more silicon for its electricity-generating panels than semiconductor makers use in all their chips and devices. The onetime "'tree-hugger' industry is not a niche business anymore," says Lisa Frantzis, director of renewable energy at Navigant Consulting Inc. (NCI ).

So what's the problem? "Global demand is stronger than the existing supply," says Lee Edwards, president and CEO of BP Solar (BP ). His company and others can't buy enough of the ultrapure polysilicon now used in 91% of solar panels. The raw material shortage has slashed growth for the industry from more than 50% in 2004 to a projected 5% in 2006.

The shortage has caused prices for polysilicon to more than double over the last two years. As Economics 101 teaches, that should prompt producers to expand capacity. But for suppliers such as Michigan-based Hemlock Semiconductor Corp., the world's largest producer, the decision hasn't been easy. For one thing, the company was badly burned in 1998. It had just built a new facility in response to pleas from semiconductor makers when Asia went into a slowdown. Demand for silicon plunged, and the factory had to be shuttered. Now the U.S., Germany, and other nations are offering subsidies for solar power -- but governments can take away incentives as easily as they put them in place. "We did a lot of soul-searching," says Hemlock President and CEO Donald E. Pfuehler. "Would the incentives go away? Is the solar industry real or just a flash in the pan?"

Hemlock finally decided that the industry is real, but only after solar companies agreed to share the risk by signing contracts to buy the future output. So in December the company began an expansion worth more than $400 million that will increase silicon production by 50%. Competitors are following suit. On Jan. 12, Munich-based Wacker started construction on a silicon manufacturing plant. The new supply, however, won't be onstream until 2008.