In states such as California, with high electricity prices and government incentives, solar is already a bargain for some customers. Wal-Mart recently said it's putting solar panels on more than 20 of its stores in California and Hawaii. Google goog is blanketing its Mountain View, Calif., headquarters with 9,212 solar panels, enough to light 1,000 homes.
The solar industry is expected to triple in the next three years, from about $13 billion to $40 billion in revenue, says analyst Jesse Pichel of Piper Jaffray. pjc Turbocharging sales are government incentives in countries such as Germany and Japan. In the USA, generous customer rebates in California and New Jersey — by far the largest U.S. solar markets — along with a federal tax credit have trimmed system prices by a third or more.
Most states don't offer solar rebates, but prices still have fallen about 90% since the mid-1980s — 40% annually the past five years — as surging sales have led to cost efficiencies, says Rhone Resch, head of the Solar Energy Industries Association. Now, experts say it will take a quantum technological leap to quickly lower prices to utility levels. An armada of companies say they are poised to do just that:
•Traditional solar makers. This group, which includes SunPower, spwr relies on standard silicon wafers as a semiconductor. They make up more than 90% of the solar industry. Some are using less silicon, because electricity is produced only in the top layer.
Evergreen Solar eslr uses two ribbons to finely shape molten silicon. Others cut silicon into wafers, losing up to half in silicon sawdust. Evergreen's method eliminates the waste.
Sharp, the No. 1 manufacturer, takes a different tack, slashing setup costs by bundling panels with racks that attach them to roofs.
•Concentrating photovoltaic makers. They use lenses or mirrors to magnify sunlight. SolFocus' mirrors concentrate sunlight 500 times, letting them use a fraction of the semiconductor found in standard panels. But the systems don't work on cloudy days and require cumbersome trackers to follow the sun, making them suitable only for utilities and big industrial customers.
•Thin-film manufacturers. They have achieved the lowest costs by layering 1% of the semiconductor in regular panels on sheets of glass. They often use material that's cheaper than silicon. That's a big advantage, because a worldwide silicon shortage has pushed up prices. First Solar's fslr production costs are $1.19 per watt of generating power vs. $2.80 for traditional solar systems. It says it will hit about $1 a watt, the price of building conventional power plants, by 2010. The start-up has contracts for $4 billion through 2012.
Another start-up, Nanosolar, embeds tiny semiconductor particles in ink, helping it churn out panels as easily as a printing press. And United Solar Ovonic deposits its semiconductor on flexible sheets of stainless steel that look like rolls of film and can be pasted on roofs at low cost.
One caveat: Thin-film panels are about half as efficient as standard systems. Thus, they need more space and are mostly geared to utilities and businesses.
Owens cautions that reaching grid-like prices could take longer than solar makers vow. States with more sunlight and higher power rates could get there sooner. Makers "have been promising the moon for a long, long time."