Think Solar-Intel, Not Solar-Google

from the hop-on-the-bandwagon dept

As more entrepreneurs set their sights on the potential to make money (and ostensibly do some "good" in the process) in the solar power industry, it would seem obvious that Silicon Valley would emerge as a hotbed of activity. Anecdotally, Silicon Valley is home to more aspiring founders and CEOs per capita than any other place in the world; people flock here ready to take their shot at the-next-big-thing. The Valley's many success stories have spawned a large group of people who have the name recognition and/or money needed to tackle big challenges. In a recent column, The New York Times draws connections between the experience and aspirations of Silicon Valley's business elite and the likelihood Silicon Valley could also become "Solar Valley".

While many people are looking for the first solar industry Google to emerge, it is companies like Intel that provide the better template for what Solar Valley businesses might look like (Moore's Law having nothing to do with it). Google became a household name and corporate giant barely a half decade after its founding. Key to that success is competing in an industry with low capital requirements, and where creating a successful brand can be a self-fulfilling. On the other hand, Intel was around for twenty five years before its marketing efforts led people to start asking for Intel Inside; even today Intel's products remain essentially hidden behind the more visible brands of PC manufacturers. Like chip companies, solar businesses face capital-intensive startup and long product development cycles. As a whole, the solar industry faces development hurdles like land acquisition, permitting, environmental review, and transmission capacity, which will limit the rate at which solar companies can grow. And solar companies are unlikely to earn much of a premium on their name: your electricity bill will not say Energized By Ausra any time soon. Even residential products will be sold through local solar installers, and homeowners are more likely to choose an installer based on the best value for the service than any particular panel manufacturer that that installer represents.

There's no doubt that interest and investment in solar power will continue to grow in Silicon Valley, and the area will almost certainly produce success stories. But the nature of the industry means that most of the magazine covers will stay reserved for members of the Internet crowd.



Reader Comments (rss)

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  1.  
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    Anonymous Coward, Feb 22nd, 2008 @ 2:13pm

    Not sure why you'd model the production of solar panels off of Google, a company that doesn't really produce a physical product.

     

    reply to this | link to this | view in thread ]

  2.  
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    BlowURmindBowel, Feb 22nd, 2008 @ 2:42pm

    Disagree...ment

    I actually disagree, how many high volume solar cell manufacturers to you expect to take root in the next 10 or twenty years? There is the one camp that is sticking w/ silicone and going for high efficiency (& high price); and the other camp is experimenting with different compounds and going for low production costs.

    So I'm expecting that eventually when residential applications start to actually show up on people's roofs. Very large houses (righ people) will have the higher efficiency panels, and smaller houses (not so rich people) will have their entire roofs covered with the cheaper less efficient type.

    I think that is going to probably be a pretty fundamental divide in the 'consumer' solar panel market for some time, barring of course any other major breakthroughs in materials or manufacturing (which also wouldn't suprise me...)

    So... rather than being concerned with how much you are going to pay your local installer to put them up, you are probably going to be pretty damn concerned with where you can get the type of panels that suit your budget/roof area.

    It could pan out though that there are several different companies that make each type, or possibly several companies that make both types as well. But it looks to me like the patents covering this sort of thing would probably limit the number of manufacturers pretty severely.

    In any event I don't really see much likelihood in the predictions made in the article coming to pass... Well, other than the fact that we probably won't see the solar industry become as big, or make as many business stars as the internet did.

     

    reply to this | link to this | view in thread ]

  3.  
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    Anonymous Coward, Feb 22nd, 2008 @ 3:04pm

    The only people who are going to use the cheaper low efficiency panels are those who don't understand how to factor in operating costs.

    The cheaper manufacturing costs of the (current) non-silicon panels is more than outweighed by the fact they are far less durable. Costs go up pretty quick when you have to replace some percentage of cracked panels every year along with the entire array every 5-8 years.

    I do agree that it's quite possible that we'll see some pretty amazing new technologies for converting solar energy to electricity, which would change the entire discussion.

     

    reply to this | link to this | view in thread ]

  4.  
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    Jared, Feb 23rd, 2008 @ 6:58am

    Why?

    What i don't get is why there's so much interest in solar anyway? it's a pathetic energy source. There's only so much energy per square unit of measurement and the sheer area needed to produce a really useful amount of energy makes it impractical. Not to mention ridiculously expensive. It'll never be a primary power source but merely augmentative which will limit its market and therefore the costs will stay high. I doubt solar will go anywhere as well it shouldn't. People should stop wasting time and money on it and work on developing REAL alternative energy sources.

     

    reply to this | link to this | view in thread ]

  5.  
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    inc, Feb 23rd, 2008 @ 10:26pm

    wy not?

     

    reply to this | link to this | view in thread ]


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