Can high-tech giants revolutionize solar market?

As companies like Intel Corp., IBM Corp. and Hewlett-Packard Co. have made moves in the solar power space, many have wondered if these high-tech heavyweights could use either their manufacturing or intellectual muscle to push down costs and thereby lower the price of solar power.

Perhaps eventually, but not quite so fast.
Because of the vast use of silicon wafers in the solar industry, it is easy to leap to the conclusion that these tech giants, which all have great expertise working with silicon, will have a big effect on the nearly $20 billion estimated market this year for solar cells and modules. Solar cells, encased in panels on the rooftops of homes and businesses, convert solar energy into electricity.

While the three tech giants have made investments in solar, their recent actions are unlikely to add a big new supply of solar cells to the market anytime soon. Even though the once-tight market for polysilicon, a key ingredient for the cells, is loosening up a bit, subsidies by governments and utilities currently play more of a role in the cost of solar power.

“Without incentives demand will fall sharply,” said Paula Mints, principal analyst in the solar research area at Navigant Consulting in Palo Alto. In the U.S., the federal solar tax credit program decreases next year, which could have the biggest impact on big, commercial installations of solar power.

MarketWatch