MARTIN GREEN HAS BEEN GOING to solar conferences for more than 30 years. But Solar Power 2006, held in October of that year in San José, at the southern end of California's Silicon Valley, was something new.
"This year there were about 6,000 attendees, compared with 1,000 last year," says Green who, as director of the Photovoltaics Centre of Excellence at the University of New South Wales (UNSW), in Australia, was a keynote speaker. "It was all investment bankers and the like, the kind of people we haven't seen at these conferences before."
The money men were drawn by solar power's recent stellar performance. From 2000 through 2005, sales of solar panels soared at a compound annual growth rate of 41 per cent, according to Paula Mints, who tracks the solar industry for California-based Navigant Consulting. "That's amazing growth for any industry," Mints adds.
In 2005 alone, the solar power sector grew 44 per cent in volume, 50 per cent in revenue and a whopping 149 per cent in profit. In that year, three of the largest stockmarket floats of technology stocks were for solar energy companies, raising over US$800 million (A$1 billion) in total.
American venture capitalists invested a record US$739 million in renewable energy start-ups, solar specialists prominent among them. This year, the industry will be worth around US$20 billion and, at the current rates of growth, by 2011, US$100 billion.
No doubt about it: solar power is hot. But photovoltaics have been around for ages, so why the sudden interest? In a word, subsidies. These have propelled solar from its traditional, off-grid niches — powering remote homes, long-distance phone lines and water pumps — and plugged it into the mainstream: the electricity grid. Today, the grid-connected market accounts for 83 per cent of solar sales.
During the 1990s, the government of resource-poor Japan poured US$200 million a year into rebates for homeowners who installed solar panels on their roofs. The incentives have since been phased out, but they have had the desired effect: close to 300,000 Japanese homes are now solar-powered; that's more than one-in-100 households. The goal is to increase the ratio to one-in-25 by 2010 and one-in-four by 2020.
In addition to a thriving domestic market for photovoltaics, the policy has also spawned a booming export industry. Japanese manufacturers such as Sharp, Sanyo and Kyocera have seized large slices of the global solar market. Sharp alone is the world's largest producer of panels with a share of around 25 per cent.
In 2000, the German Bundestag passed the Renewable Energy Act, which legislated innovative 'feed-in' tariffs. These require utilities to buy surplus electricity at premium prices from owners of grid-connected photovoltaic systems; in effect, presenting purchasers of solar panels with a 20-year annuity. Householders and farmers who take out a low-interest loan to stick a solar system on the roof of their home or barn receive rebates that exceed repayments.
Thanks to this generous program, environment-friendly Germany has rapidly become the largest market for solar energy, accounting for 45 per cent of worldwide demand in 2006. As in Japan, a whole new industry has sprung up, employing tens of thousands of workers.
