The Future Is Bright and Sunny
Posted May 21, 2008on:
The truth is renewable energy investments have helped Silicon Valley rebound from a slowdown. Last year, its entrepreneurs clubbed together to remove barriers to wider adoption of solar technology. Adoption is growing but is driven by government incentives. As solar power prices drop and conventional electricity prices increase, incentives will no longer be necessary. Experts differ on precisely when this will happen, but Deutsche Bank estimates this at no more than five to seven years from now. “Our estimate is very conservative,” says Stephen O’Rourke, managing director of Deutsche Bank Securities in New York. “So, I would not be surprised if the industry becomes viable earlier than our prediction.”
Powering this movement are the likes of Jigar Shah, the 32-year-old founder of Baltimore-based Sun Edison. “Customers just pay a fixed rate that is at or below current electricity prices for the solar electricity generated from these panels for 10 years,” says Shah.
Half the global production of photovoltaic cells goes to Japan, mainly in grid-connected homes. Japan makes 40 per cent of the $6-billion (Rs 24,000-crore) solar market, expected to touch $40 billion (Rs 1,60,000 crore) by 2010. Solar-powered homes, common in Germany (40 per cent share) and the US, give power to the grid during the day (the meters run backwards) and draw power at night. This lowers the net electricity consumed by the grid. The US is the fastest growing market, with 40 per cent growth every year for the past five years. While it is incentives that currently sustain the business, optimists predict that the photovoltaic cell market could be worth $1 trillion (Rs 40,00,000 crore) in a few short years.