Solar panel shortage to continue through 2006

When it comes to solar power, the problem today is not demand--it's supply.

A shortage of polysilicon solar panels, those mirror-like panels seen most often on the top of buildings, will continue to crimp the potential for solar energy for a second straight year, according to a report from investment bank Piper Jaffray.

Alternative solar technologies, such as thin-film solar panels, however, will begin to pick up the slack in 2007 and allow the industry to accelerate again.

The production of technology for harvesting solar energy will grow by only 9 percent this year, rising from 1,709 megawatts in 2005 to 1,868 megawatts. (The numbers reflect how much energy the entire output of solar technology could harvest at any given moment.)

Shipments would likely be higher, but factories can't produce enough silicon solar panels, according to the study and several different executives. Output of solar technology rose by 67 percent in 2004 and by 35 percent in 2005. The shortage, which began in 2005, retarded grow that year, too.

In 2004, more processed silicon got consumed in making solar panels than in making semiconductors, according to Nick Parker, chairman of Cleantech Venture Network.

By 2007, however, production of solar technology will grow by 18 percent to around 2,200 megawatts, with a substantial portion of the growth coming from thin-film solar panels. Thin-film manufacturers incorporate energy harvesting molecules into polymers and coatings.

Typically, thin films--despite a variety of underlying technologies--aren't nearly as efficient as using rigid silicon panels to harvest solar energy. Thin-film solar panels, however, are cheaper to manufacture. The solar-harvesting technology can also be incorporated unobtrusively into windows and roof tiles.

Thin-film production from companies such as Evergreen Solar and Energy Conversion Devices will grow by around 70 percent in 2007, according to the report, while polysilicon production will grow by 9 percent.

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