by Phil LoPiccolo, Editor-in-Chief, Solid State Technology
The promise of solar power, both to solve the world’s energy problems as well as to fuel stellar market growth, packed SEMICON West’s center stage venue Wednesday. Rhone Resch, president of the Solar Energy Industries Association, delivered a keynote outlining the opportunities for the semiconductor industry to expand the adoption of photovoltaics (PV) technology in the US.
The upside for solar power in the US is huge, Resch contended. Of the total 4000B kWh of electricity consumed each year, only 1.5B kWh, or 1/30 th of 1%, comes from solar energy. While that’s “pretty pathetic,” he said, “it shows that solar has a tremendous opportunity for growth.”
Solar power’s future appears bright when one considers its potential for replacing traditional energy sources. For example, coal, which generates >50% of all electricity produced annually in the US, is a target of growing concern because its price continues to rise, as does the amount of greenhouse gases its combustion pumps into the atmosphere, Resch said. “Since many of these older power plants have been around for more than 50 years, it’s a perfect opportunity to replace them with solar technology,” he noted.
Moreover, unlike fossil-fuel plants, solar panels need not be confined to a single site but rather can be installed in virtually any available space, Resch explained. He noted that the technology is proving successful in a host of novel applications around the world, including a Fed Ex terminal and US Navy carport in California, a brownfield site in New Jersey, a soccer stadium and solar park in Germany, a solar community in Japan, and highway sound walls in Switzerland.
Annual solar energy production worldwide has maintained 46% CAGR/year since 2000, led by Germany (>50%) and Japan (~25%), with the US making up about 9%. “Even though the US invented PV and further pioneered advanced PV technologies, it has not been the primary marketplace,” said Resch. The irony is that US has the best solar “resources” of any developed country in the world in terms of the amount and intensity of sunlight available, he said, while Germany has solar resources equal to Alaska.
But the US solar market may heat up quickly. Looking forward, the global CAGR through 2010 is expected to average 36.5%, with Germany still the biggest user (see chart above). But the US is seen growing faster than all other regions, expected to average 83% CAGR through 2010, Resch pointed out (see chart below). “To maintain that pace, the industry will need solutions, in terms of first-, second-, and third-generation equipment that semiconductor suppliers can bring to the industry.”
What will spur growth?
Perhaps first and foremost, they key driver of solar demand in the US is a huge push toward energy independence, and solar can replace sources that must be imported from unstable countries, Resch said. Other drivers include energy security — which can be increased by solar energy’s ability to reduce peak power demand and stabilize the electricity grid — as well as escalating electricity costs, and the fact that solar energy can reduce carbon emissions.
Despite these factors, solar is still more expensive than energy based on fossil fuels. However, a positive trend is that government policies are being enacted to help jumpstart industry efforts to reduce costs. Currently, 23 states have established “renewable portfolio standards,” which require utilities to generate certain percentages of their electricity from renewable sources, including solar energy.
In addition, the federal government has been assuming a more aggressive role in promoting solar energy. In 2005, Congress enacted the Energy Policy Act, which included provisions for government tax credits, including a residential credit totaling 30% for PV installations systems for two years. Congress is now working on a bill to extend tax credits for eight more years, which should alleviate the biggest concern among manufacturers — that the market is being artificially propped up by short-term government policies — and allow for the industry to ramp up and develop capabilities to implement solar on a large scale, Resch said.
The Senate has passed a version of that bill and the House has taken it up over the last several weeks, and Resch is hopeful that by October President Bush will sign a version that will provide significant incentives for solar power. If the bill is passed and if state programs continue to expand, he thinks the US solar industry will experience a growth similar to that in Germany in recent years, perhaps averaging 67% through 2015. — P.L.