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.