Solar Power

Solar power, which is much more expensive than other forms of power generation, would become more competitive if lawmakers tax or price carbon-dioxide emissions.

“Electricity prices could go up 50 percent over the next 10 years. Then solar will be cheaper than the grid,” said Jesse W. Pichel, a senior analyst at Piper Jaffray, who expects rising oil and coal prices and falling solar costs as companies innovate the way semiconductor chip firms did. For now, solar relies heavily on government subsidies, including a $2,000 federal tax credit for installations, supplemented by generous aid in places like California, New Jersey and the District.
Shares of Suntech Power Holdings , a Chinese maker of photovoltaic cells used in solar panels, were up as much as 35 percent in the past year before sliding during the market turbulence this month. Since January, shares are up 3 percent. The company’s output has surged, however, making it the world’s fourth-biggest manufacturer of solar cells in 2006. Next year’s Summer Olympics in Beijing could prove to be a showcase for Suntech’s products.

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Besides Suntech, the biggest solar cell producers in 2006 were Sharp, Q-Cells, Kyocera and Sanyo. Q-Cells, listed on the Frankfurt stock exchange, has doubled. Other solar producers are relatively small parts of big Japanese or Korean conglomerates. While the problem of polysilicon shortages — and a sevenfold price increase over five years — is squeezing profits at these firms, it has proved a boon to companies that turn sand into polysilicon. Among those companies are a unit of Dow Corning; a German company called Wacker; a Norwegian firm called REC with U.S. plants; and MEMC Electronic Materials, a U.S.-listed company in Missouri. The polysilicon industry is expected to more than double production by 2010. Shares of Wacker, listed on the German stock exchange, have jumped 70 percent since Jan. 1; MEMC has gone up 50 percent.

Washington Post