According to the Financial Times, a global shortage of poly-crystalline silicon, which is the basic raw material used to convert the sun’s rays into electricity, may turn the whole solar industry into an unviable one, at least for the next 5 years. It was projected that this shortage would be happening until 2008, hence poly silicon prices have doubled in 20 months and will rise to around 30% over the next three years.
The Economist on the other hand points out recent investments on solar energy, which are at $63 billion this year, up from $49 billion last year and $30 billion the previous year, having clean energy take one tenth of America’s venture capital. Their editorial suggests that “the flood of money into clean energy is better news for society than it is of investors.”
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With soaring demand, such as that coming from California, which according to the Gobernator, aims to generate 20% of its power from renewable sources; or that coming from Germany which is the largest solar market in the world, despite the fact that the sun is not a regular visitor there, solar projects receive as much as EUR 0.57 for each kilowatt-hour, of electricity generated, compared with the usual EUR 0.05 for dirtier power.
The price for generating solar power has consistently fallen over time, going from $200 per watt to around $2.7 per watt. Yet, a Merrill Lynch report on the solar sector states that the transactions on poly silicon are unsustainable, at prices of $200 a kilogram, which is around 500% higher than in 2004. Goldman Sachs on the other hand expects output to be doubled by 2010.
What is certain is that the risks ahead in renewable energies should be further considered. The opportunity and the need are certainly there, but the targets have to be realistically considered, together with what assures to be a surging competitive market.


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