Solar Sales Brighten Up Despite Oil's Bargain Price
Environmental laws make solar an increasingly attractive option
DEMAND is soaring worldwide for products that turn sunlight into electricity.
``We're starting to see the growth everybody projected years ago when we thought the cost of a barrel of oil was going to be prohibitive,'' says Mark Stimson, marketing communications manager for Siemens Solar Industries.
The German-owned company leads the world in photovoltaic (PV) production at its site in Camarillo, Calif. Despite an eight-month investment to expand its capacity, ``we've got quite a backorder of product,'' Mr. Stimson says. ``Demand exceeds supply.''
PV products are everywhere: in home-lighting kits in Peruvian villages, in streetlights in Beirut, grid-connected rooftop arrays in Germany, air conditioners on recreational vehicles in the United States, telecommunications facilities in Mexico, and water pumps in India.
``There's growth in every single market segment,'' says Paul McClusky, product manager for ``thin film'' PV cells made by Solarex Corporation. The Maryland-based subsidiary of Amoco Corporation is the largest US-owned firm in the business.
South Africa recently bought a million dollars' worth of PV panels from Solarex. The panels were installed in microwave repeater stations erected to broadcast the news from the historic elections the country will hold tomorrow, says Sarah Howell, Solarex's media coordinator.
Low oil price no hitch
Strategies Unlimited, a consulting firm in Mountain View, Calif., projects annual growth of 18 to 22 percent for the global PV market. Stimson estimates its size will be 150 megawatts of generating capacity this year. That is as much as his company installed over the past 15 years.
One reason for the growth is the near-total absence of overlap in the energy markets served by oil and electricity. Thus, declining real oil prices do not discourage investment in solar energy.
A second is that solar energy does not pollute - increasingly a consideration for utilities looking for ways to comply with environmental protection laws.
A third reason for growth is that production costs have fallen as manufacturers scaled up and automated their plants. Last year, when Siemens introduced a new line of PV panels costing less than $4 per watt, ``the market took off,'' says Allen Barnett, president of Delaware-based Astropower.
Mr. McClusky predicts that Solarex's new line of thin-film cells will reach the market at the end of 1995 selling for around $3.30 per watt. Siemens, meanwhile, is developing cells that use copper-indium diselenide instead of silicon. Those could cost the same as ordinary building materials, Stimson says.
A final reason for the boom is the millions of people who live in the world's sunbelt without an electricity grid near by.
Solar for the grid-less
``For rural electrification, [PV] is the cheapest way to go,'' Dr. Barnett says. His company was formed five years ago specifically to export. ``All the marketing experts told us we were crazy. I knew electricity was more valuable offshore because it was less available.''
Today 80 percent of Astropower's revenues come from overseas. China, India, Indonesia, Brazil, and Mexico all have aggressive rural electrification programs, Barnett says. His company has sold products to all but Brazil.
Barnett expects 100 percent growth in Astropower's foreign revenues this year, on top of last year's 140 percent.
Thanks to 60 foreign distributors ``from Canada to Fiji to China,'' 65 percent of Solarex's production in 1993 was sold abroad, Ms. Howell says. She cites the ``vaxicool,'' a refrigerated container for transporting vaccines, as a solar-powered product meeting the needs of villages without electricity. Howell has a photo of one tied to a camel's back.
Most of Solar Outdoor Lighting's sales are in the US, says Alan Hurst, president of the Stuart, Fla.-based company. But he expects that to change. His $2,000 streetlights are found in Mexico City and Lagos, Nigeria, as well as Dallas and Miami.
Cost and speed of installation are reasons he is able to sell to 16 US utilities. Mr. Hurst cites one case in which a city needed streetlights for a parade, but conventional lights would have required a week to erect. Sometimes power is as tantalizingly near as the other side of the street, but requires a $3,000 transformer or expensive digging to tap.