Energy 2.0

Rising Sun

Posted on: July 8, 2008

The aggregate market valuation of these 28 solar products manufacturers in last year was $118 billion. Investors have been snapping up stocks of solar companies from around the world.

Company/Country

Market Capitalization ($U.S. bil)

REC/Norway

$17.40

ORKLA/Norway

16.7

MEMC/US

12.4

WACKER/Germany

9.9

Q-CELLS/Germany

9.5

FIRST SOLAR/US

7.3

SUNPOWER/US

6

SUNTECH/China

5.8

SOLARWORLD/Germany

5.5

LDK/China

4.5

TOKUYAMA/Japan

4

DC CHEMICAL/South Korea

3

CONERGY/Germany

2.6

YINGLI/China

2

MOTECH/Taiwan

1.8

JA/China

1.5

TRINA/China

1.4

ECD/US

1.2

ERSOL/Germany

0.9

EVERGREEN/US

0.9

RENESOLA/China

0.7

E-TON/Taiwan

0.7

SOLON/Germany

0.7

SOLARFUN/China

0.5

SOLAR MILLENNIUM/Germany

0.5

ATS/Canada

0.4

CHINA SUNERGY/China

0.3

CSI/China

0.2

TOTAL

118.1

 

Sources: Bloomberg Financial Markets; FT Interactive, Reuters Fundamentals and Worldscope via FactSet Research Systems; U.S. Department of Energy.

 

Sources: Bloomberg Financial Markets; FT Interactive, Reuters Fundamentals and Worldscope via FactSet Research Systems; U.S. Department of Energy. Sources: Bloomberg Financial Markets; FT Interactive, Reuters Fundamentals and Worldscope via FactSet Research Systems; U.S. Department of Energy.

Solar power is still more expensive than fossil fuel generated electricity. But the gap is closing. The rule of thumb in the solar business: Every time the volume of solar cells doubles, its cost drops by 20%. Governments in Germany and Japan have consequently offered generous subsidies to local consumers and companies who invest in building solar power. Those subsidies have sparked booms.

According to the International Energy Agency, by the end of 2005 Germany led the world with the most installed photovoltaic systems (1.43 million kilowatts) followed by Japan (1.42 million kilowatts). The U.S. was a distant third (480,000 kilowatts)..)

The race is on to find a way to make solar grow up so that it can compete, dollar-per-watt, against any fuel on the planet.

The long-term forecast? Bright, with big patches of innovation ahead.

Michael Splinter was raised on the most powerful incantation in the tech industry, Moore’s Law, which roughly holds that computing power per dollar doubles every two years. During his 20 years at Intel. Splinter saw this law deliver exponentially better products and profits.

Now, as chief executive of Applied Materials, the biggest pick-and-shovel maker for the semiconductor and flat-panel display industries, Splinter, 56, wants to forge a sunny-side-up version of Moore’s Law. “Can we, with our customers, drive down the cost per watt of photovoltaics?” Splinter asks. “We’ve got to.”

Currently photovoltaics cost $2 to $3 per watt to build, down from $22 in 1980. Splinter thinks he can help drive the cost of solar to under $1 a watt. At that price, even after adding a dollar or two per watt of installation costs, solar power would rival grid-delivered fossil fuel power. (Bear in mind that watts here are measured at midday peaks. Even in California an installation rated at 1 kilowatt will produce only 1,600 kwh a year.)

Ambitious enough to be on Intel’s shortlist of future chief executives, Splinter leaped at the chance to run his own show at Applied in 2003. The growth in solar captured Splinter’s attention early on. Slowdowns at computer chip makers, who buy nearly all of Applied’s equipment, hit hard. The $9.2 billion (revenue) company has a price-to-earnings ratio below that of Kraft Foods The solar cell manufacturing industry for years made do with hand-me-down tools from the computer chip industry. But last year solar cell manufacturers bought more silicon wafers than chipmakers–and solar’s demand for wafers is growing three times as fast as demand from the rest of the electronics industry. Applied will likely hit $400 million in contracts for solar manufacturing gear by year-end; Splinter wants $1 billion by 2009.

Applied intends to trim the industry’s costs in four ways: boost solar factory throughput, improve the productivity of every tool, cut materials costs by using photovoltaic materials more sparingly and raise solar cell efficiencies. Splinter has already spent close to $1 billion to hire hundreds of people for his solar group, buy two small thin-film equipment makers and invest in a silicon wafer firm in California.

Charles Gay, who is leading Applied’s solar business, obsesses about speed. Computer chips are made in batches; solar cells are produced continuously. Coating tools once used to put films on sheets of glass are being tweaked so they can also rapidly coat thousands of individual wafers. Thin-film solar makers want to work with the 64-square-foot sheets of glass used by Applied’s LCD customers, but solar glass is four times as thick as display glass. So Applied is strengthening the arms of the robots it sells to hold glass sheets. “We’d like to move one ton of silicon wafers through a line in an hour,” Gay says. At that speed one factory could produce a gigawatt of solar modules per year, ten times as much as the U.S. is now installing. “This is like the 1970s in the computer chip business,” says Splinter, flashing a 200-watt smile.

 

Advertisements
Tags:

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Calender

July 2008
M T W T F S S
« Jun   Oct »
 123456
78910111213
14151617181920
21222324252627
28293031  

Archives

Blog Stats

  • 10,833 hits

Top Posts

%d bloggers like this: