One evening last month, a mix of
philanthropists, charity executives and environmentalists
gathered at the New York home of Peter Yarrow of the folk group
Peter, Paul and Mary.
The topic of the evening was not 1960s music or world
hunger, but solar power.
In this undated handout photo from Solar Systems shows a solar power plant in the Mojave Desert with panels reflecting light up to a central tower, similar to the one the Australian government announced Wednesday, Oct. 25, 2006 will help build the largest solar power plant in the world as part of a new strategy to combat global warming.The government, under fire for refusing to sign the Kyoto Protocol on reducing greenhouse gas emissions, will contribute 75 million Australian dollars (US$57 million; euro45 million) to the A$420 million (US$319 million; euro254 million) project to built a 154 megawatts solar power plant in Victoria state which will use mirrored panels to concentrate the sun's rays, Treasurer Peter Costello said. (AP Photo/Solar Systems,HO)
Across the United States, at similar gatherings, bankers
and hedge fund managers rub shoulders with philanthropists and
solar panel installers. These "solar salons" are orchestrated
by Travis Bradford, a former fund manager and corporate buyout
specialist, in an effort to hasten what he calls the inevitable
uptake of solar power.
"My guess is the U.S. will have one of the fastest growth
rates over next five years. One of the interesting things about
the U.S. when compared to other industrialized countries is
that it has more sun per capita," Bradford said in an interview
Bradford is founder of the Prometheus Institute for
Sustainable Development, a group based in Cambridge
Massachusetts that promotes the use of sustainable
In his book, "Solar Revolution," Bradford argues that the
high price of oil, advances in solar technology and an easing
in the cost of silicon used to make panels will combine to make
solar the cheapest source of power within the next 20 years.
Skeptics say short supplies of silicon will cap output of
solar panels. But panels use less silcon every year, and plants
coming on line will ease supply in 2008, Bradford said.
The shift from fossil fuels to solar energy will take place
not for environmental reasons but as a result of
self-interested economic decisions made by individual users,
according to the book, published by MIT press this fall.
SMALL, BUT GROWING FAST
As a slice of the total energy pie, solar is almost
insignificant, producing just 0.1 percent of electricity in the
United States, the world's largest energy consumer. But it is
growing 30 to 40 percent a year while the cost of making solar
panels has been dropping about 7 percent annually.
Solar power is likely to get more attention as governments
look at ways to cut emissions of gases that cause global
warming. Ministers from almost 190 governments meet in Nairobi
from November 6 to November 17 for annual U.N. talks about ways
to speed up the fight against global warming.
Environmentalists and many financial analysts envision a
not-too-distant future when the 35 cent per kilowatt hour cost
of power from solar panels will halve to equal the average cost
of power from fossil fuels.
"Whether it's 2010, 2012, or 2015, I think everyone can see
the writing on the wall," said Jesse Pichel, solar industry
analyst with investment bank Piper Jaffray in New York. When
costs become equal, "solar power demand is infinite," he said.
David Smith, an analyst at Citigroup in New York wrote in a
research report in October that solar power has "crossed the
tipping point and is on the cusp of a significant expansion
between now and 2010."
Environmentalists agree a height has been cleared. "The
general public hasn't been this interested in solar and
renewable energy since the days of Jimmy Carter," said Alan
Nogee, the clean energy director at the Union of Concerned
Scientists. During the oil-starved late 1970s, then President
Carter introduced an energy conservation plan as the "moral
equivalent of war."
In terms of the financial community, "There hasn't been
this much interest ever," Nogee said.
A big factor is the risk of an aging electricity
infrastructure that is clearly overstretched by demand for air
conditioning. Memories of exploding transformers, blackouts and
brownouts from the last few summers are fresh.
Solar panels could keep the grid stable and cut the need
for new power plants in the future as electricity demand rises
at 2 or 3 percent per year.
"If you put solar on the roof, essentially you've hedged
electricity prices for the next 20 years," said Pichel.
Although President George W. Bush pulled the United States
out of the Kyoto Protocol in 2001, the states have taken up the
fight to cut greenhouse gas emissions at power plants. More
than 20 states have passed laws that require renewable sources
for some electricity.
At a recent "solar salon" in New York, Jigar Shah, the
founder of SunEdison LLC, one of the largest U.S. solar panel
installation companies, talked with a banker from Lehman
Brothers about ways for businesses to finance the initial costs
of solar power.
"Solar is a complex subject and to talk with folks who are
trying to be constructive in this space is immensely
beneficial," Shah said.
For now, Prometheus has to invite people to salons because
the initial costs of installing solar power can take seven
years or more to pay back. But when the installation costs come
down, homeowners will be organizing their own meetings, Pichel
Already "interest has exceeded the capacity of certain
living rooms," said Murat Armbruster, who helps run the salons
and along with Bradford runs a small hedge fund investing in
Hosts are enthusiastic too. Yarrow, whose songs included
the 1963 hit "Puff the Magic Dragon," said, "There were more
people interested in solar in my living room than started the
Civil Rights movement."
Copyright © 2006 Reuters Limited.