Betting on solar power
The popular notion of the solar industry is one populated by small-time visionaries (or, depending on your point of view, crackpots), all of them either victims of the all-powerful oil industry or hopeless idealists with no realistic business plan. But as the price of oil gets higher and the need for energy alternatives becomes more apparent, a close look at the industry defies the popular conception.
Solar energy is now dominated by some of the biggest and smartest companies in the world, from the oil, utility, and electronics industry, and these companies are ready to reap the benefits as the cost of solar energy becomes more and more competitive. And that will come soon, both through technological changes that are making the idea all the more practical and the increasing price of oil and other fossil fuels, which seems at this point to be irreversible.
According to a Business Week article ("Another Dawn for Solar Power", 9/6/2004), a mere 0.07% of US electricity is produced by solar. But solar use in Japan and Europe, where fossil fuel prices have not be kept so low, is growing fast, at over 35% a year. And new techniques are driving down the cost per kilowatt hour just as the cost of oil-, coal-, and natural gas-based kilowatt hours are rising to that level.
The big winners will be the established companies. It is notable that a few big companies in far-from-sunny Japan and Germany are leaders in this field.
In terms of capacity sold (see table below), the current leaders include Japanese electronic powerhouse Sharp, Mitsubishi, and Sanyo; oil companies Shell and BP; and Germany-based utility giant RWE. Of smaller, focused players, there are Isofoton (Spain), Q-Cells (Germany), and Photowatt International (France). These latter three companies are no sufficiently capitalized to grow in a big way, while the others have the resources and worldwide presence to dominate. These big manufacturers have the money to buy or form joint ventures with a few innovative companies that keep developing improved technologies in this field.
The technologies and cost structures are not yet ready for explosive growth, but they look headed that way. There will doubtless be shakeout among the leaders and some new players; but you can see an oligopoly forming, acquisitions about to happen, and these major companies are eager to be among the few survivors.
Solar power leaders
