Penny Stock Columns on the OTCBB

Google's Sun Power

04-11-2008

by Dennis Fitter

The limitless potential of solar power continues to keep the industry in the news and drive investor intrigue. The Solar Power Conference and Expo, the premiere solar event in the US has grown from 1,100 attendees to over 12,500 in just 4 years. This year’s expanded San Diego expo almost immediately sold out of exhibit space months before the event.

Renewable resource minded companies are anxious to show the world their leadership. Google is installing the largest private solar power system in the US. The Google initiative clearly defines the derived benefits of solar generated electric power. The 9,212 solar panel system will generate 1.6 megawatts of electricity. That takes care of 30% of Google’s massive energy needs and translates into a $400,000 annual cut in the utility bill and reduction in CO2 emissions by 3.6 million pounds.

Photovoltaic devices – PVs - are made from various types of semiconductor materials, but single-crytalline, multicrystaline, and amorphous silicones are by far the most common. Current growth in solar power production devices is predicated upon improved conversion of sunlight energy into electric energy. Early PVs converted only about 1 to 2% while today, companies are attaining 30% efficiencies. That, has driven the cost down to a tenth of what it was in the 1970s.

As further economies of scale are achieved cost is expected to be driven down even more. This, despite soaring increases in the price of polysilcon. In the past five years, increased silicon demand and scarce supply has pushed the price from $20 to more than $300 per kilogram. Increased production capability is not easily accomplished. Cost of plant, environmental regulation, and lengthy time lines are feared to be working against any short term remedy. It seems the fear is unfounded.

Contrary to rumor on the street, there is no need to worry about silicon supply.

Enter China, to the rescue of this growing industry with silica to silicon production plants coming on-line in record time at reduced cost. How they are doing it is a complete separate story for another day.

The writer does not own shares in the above stocks.

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