which grows at a rate of 20 percent per
year. German exports accounted for 15
percent of worldwide sales of solar panels
and other photovoltaic equipment in 2006.
Spain has a solar industry that has
benefited from favorable government
policy via a Royal Decree introducing
“feed-in tariffs,” which are similar to
Germany’s Renewable Energy Laws. And,
unlike Germany, Spain has a favorable
geographical location that provides a
generous share of sunlight year-round.
It has also acquired generation property
in the U.S. Southwest.
Similarly, buoyed by government
subsidies, Japan is the world’s leading
exporter of photovoltaic solar cells. The
country accounts for almost 40 percent
of global production. Its government
has recently embarked on the ambitious
goal of equipping a third of all households with solar panels by 2030. In
addition, it plans to set aside $21 million
to create a research institute to improve
the cost-benefit ratio of solar cells.
However, the subsidy policy has been
controversial. It was eliminated two
years ago only to re-emerge in response
to a decline in the industry.
Until recent economic setbacks,
China and Taiwan’s photovoltaic industries leveraged low labor costs to witness
growth rates as high as 25 percent per
year as major exporters to Germany and
Spain. China and Taiwan increased their
share of global solar cell production, rising to 44 percent in 2008 from 35 percent
in 2007. India has also sought to invest
in developing a solar industry.
The Chinese government has used
direct subsidies and regulatory means to
drive adoption of solar into the country’s
infrastructure and has engaged in public
education to promote solar. As with other
producers of photovoltaics, the country
has encountered an obstacle to growth
due to worldwide shortages in polysilicon.
The United States continues to host
most of the world’s concentrated solar
thermal power capacity. However, solar
currently represents less than 1 percent
of the total of energy sources, and
the industry has had limited support
from federal government subsidies
When solar technologies
have been given the opportunity, they have proven to
be effective in contributing
to both the needs of
energy consumers and
and incentives, the latter of which are
based on tax credits aimed at bringing
solar into parity with traditional energy
sources. So far, in the United States, support for solar has been mainly at the state
level; the most growth has occurred in
California, New Jersey and Nevada.
Nevertheless, solar energy manufacturing grew 74 percent in 2007, led
by the expanded capacity of thin-film
photovoltaic, silicon manufacturing and
other equipment production. Installed
grid-tied solar photovoltaics grew more
than 48 percent in 2007 compared to
2006 and, as of 2008, the United States
became the third-largest installer of photovoltaic solar energy worldwide, behind
Europe and before Japan.
Meeting the challenge
Yet grid-tied solar polysilicon-based photovoltaics are not cost-effective compared
to off-grid implementation, which is a
potential boon for rural and developing
areas. Unfortunately, however, off-grid
solutions are not being widely adopted due
to high upfront costs. The increasing scarcity of polysilicon is also driving up costs.
Solar thermal has lower upfront costs
but is also much less efficient and not yet
competitive with legacy sources on cost.
Thin-film photovoltaics may address both
upfront costs and operating efficiencies
but is still under development. Investment
is required to tip the balance towards a
self-sustaining economic model.
Due to an adjustment in its solar tariff
program, Germany has recently reduced
the amount of tariff by 10 percent, while
Spain has implemented a cap on its
tariff program, restricting the number
of eligible solar installations. The declining incentives in Europe coupled with an
increased worldwide supply are expected
to lower the costs of solar, put pressure
on suppliers, and force an industry-wide
shakeout that may make adoption more
In the United States, the recently
passed economic stimulus bill contains
key items favorable to solar energy. These
include the creation of a Department of
Treasury Grant Program, improvement
to the investment tax credit by eliminating International Trade Commision
penalties for subsidized energy financing,
a new U.S. Department of Energy Loan
Guarantee Program, tax incentives for
manufacturing, and a 30 percent refundable tax credit for the purchase of manufacturing equipment used to produce
solar material and components.
As an international society, OSA
advocates research and development in
alternative and efficient energy generation
and conservation. In fact, in February of
this year, the Society adopted a formal
position stating that it supports government funding and incentives that spur
innovation in optics and photonics in
order to foster new energy technologies.
Developing nations stand to benefit
most from adopting solar. According to
the United Nations, more than 2 million
villages worldwide are without electric
power to supply them with water, refrigeration, lighting and other basic needs.
Moreover, the cost of extending the utility grids is prohibitive. Solar photovoltaics represent a viable, localized solution
for managing energy needs in fragile and
When solar technologies have been
given the opportunity, they have proven
to be effective in contributing to both
the needs of energy consumers and the
environment. Incentive programs funded
either through tax credits or direct subsidies have helped put solar on equal footing with other legacy sources of energy. t
Alexandre Fong ( email@example.com) is senior vice
president of life sciences and instrumentation
for Optronic Laboratories, LLC, and Chromo-Dynamics, Inc. He is also the chair of OSA’s
Public Policy Committee.