In the 1950s Robert Hansen built a house in which sun-warmed water heated the floors and roof. Now, several homes later, he has moved on to more advanced solar-power technology. He has retrofitted his roof with an 80-foot-long solar array and two rows of 72 photovoltaic panelsdelivering a total of 8.6 kilowatts of power. The setup cost more than $10,000, but Hansen, who is 83 years old, expects it to start paying for itself in about four years.

Hansen is part of a community that is quietly blossoming. Now an increasing number of people are seeking out solar energy, harvested by photovoltaic (literally, "light electricity") solar panels. The power industry, too, is showing greater interest, and small manufacturing companies across the U.S. are selling ever more efficient photovoltaic components. Technology once relegated to off-grid powerfor remote telecommunications, offshore oil-drilling platforms and rural infrastructureis now feeding some schools, churches, wholesale warehouse stores and national park structures. BP Solar, the green arm of the petroleum giant BP Amoco, has plans to build completely solar-powered roof bonnetsmore than 200 a year, according to a company spokesmanfor its parent company's new gas stations.

Some experts believe the time is right for incorporating solar power on a larger scale into our infrastructure. It will happen gradually, but the market for solar power has in fact increased dramaticallyby about 20 to 40 percentover the past five years. Harry Shimp, president and CEO of BP Solar, says that the average yearly growth rate of the industry during the 1990s was 20 percent. In the past two years, the photovoltaics market grew 30 percent annually, a trend Shimp expects to continue through 2005. "That's still a tiny fraction of 1 percent of the power supply," he says, but adds, "We like to compare ourselves to the telephone industry 10 years ago or computers 20 years ago. We're at an inflection point of a growth curve."


TOP PRODUCERS of the total sales of photovoltaic cells worldwide are listed above. These eight companies account for 80 percent.

Measured another way, the total worldwide market for solar cells in 2000 was about 280 megawatts (MW)or enough to supply electricity to about 77,000 houses for a year, according to Donald Osborn, head of the renewable energy division of the Sacramento Municipal Utility District (SMUD). SMUD serves its customers with one of the largest utility-run solar arrays worldwide, which generates 8 MW for about 2,200 houses. In all, the U.S. consumes about 25 MW of solar power, according to Paul Maycock, president of PV Energy.

Elsewhere solar power is put to far greater use. In Germany and Japan, utilities and government subsidies have encouraged the construction of new buildings that take advantage of the latest in solar technology. In Japan, 50 new MW of photovoltaic cells are built every year for residential and commercial buildings. Shimp estimates that about 5 percent of Japan's newly constructed homes sport photovoltaic cells on their roofs. These houses are also "plugged in to the grid." At peak hours of sunshine, when the users cannot take advantage of all the power their systems produce, they feed it back into the infrastructure.

Such incentives and returns would help the solar power industry grow in the U.S., Osborn says. SMUD has signed five-year contracts with several manufacturers who make components for photovoltaic solar power systems. They have also contracted with builders to construct new houses with cutting-edge solar roofsa bulk transaction in California's mass housing market. "Even before this California energy market went crazy, we were seeing the way we were investing would be cost-effective for our customer-owners," Osborn adds. "It's even a better investment now," with a drought looming and an electricity-savaged summer ahead.

In fact the outlook for solar power in California is good. Governor Gray Davis has been supportive of using alternative and renewable energy sources, including solar power. And SMUD is talking to the San Francisco Board of Supervisors about the possibility of placing a 10- to 15-MW solar array on public buildings. In addition, the utility has implemented a joint operating agreement with Davis, a community 20 minutes southwest of downtown Sacramento. The Los Angeles Department of Water and Power is also on its way toward using more solar power under the lead of its general manager, David Freeman, the former head of SMUD.


SOLAR ARRAYS are finding their way into more mainstream uses, such as this SMUD installation in Sacramento.

Industry experts do caution, however, that putting more solar power arrays to work here in the U.S. will require careful planning. Critics of solar power charge that conditions for optimal solar energy production are rare and that even then, the conversion of solar energy is less than ideal at about 15 percent efficiency. Moreover, they note that the initial costs of installing a photovoltaic system can be staggering, at $12,000 or more for one residence.

To counteract such arguments, Osborn points out that SMUD's policies of bulk purchasing and installation have brought the price down. Their initial costs for photovoltaic systems have shrunk to $1.50 per watt; the market price for individual modules is now $3 to $3.50 per watt (purchases at volume are generally around $2 per watt). Those costs include standard installation and materials, making SMUD's program a bargain for its customers.

And the deal gets sweeter considering the long-term payoff. According to Maycock and the Department of Energy, estimates show that more efficient and newer systems pay for themselves in about four years. If a utility or government can further subsidize the costs, as SMUD does now, the customers win all around. Perhaps the biggest advantage of photovoltaicsone not measured in dollarsis that they are a relatively clean energy source, even considering the environmental impact of manufacturing them (see sidebar).

One fear is that solar energy could be "killed with kindness." Osborn states bluntly that if the current round of legislation coddles the industry too much, efficiency will drop and solar power will remain an ungainly market beast. Still, he concedes that some investment is necessary, along with government incentives and subsidies.

The Japanese government invested almost $500 million in photovoltaics in 2000, according to the Department of Energy. The U.S. set aside only $82 million. Given cuts in the current federal budget for renewable energy research and development, it is hard to believe any more money for solar power is coming. The burden may be left to the consumers and manufacturers.

But consumers are getting into the game. According to Osborn, SMUD is overwhelmed with requests to retrofit houses in its district, although it took 10 to 15 years to get to that point. Despite minimal marketing efforts, the utility now has 800 customers waiting for fittings. "Any projection for a period of five years and longer of what the growth and penetration of photovoltaics will be, on the face of it, will sound unreasonable," he says.

Maycock, who serves as an advisor to California on solar projects, says that with the state's proposed $50-million preliminary budget ($5 a watt to purchase 10 MW of power), the cost is about one twentieth of that for a new coal plant. "It's dramatic for us in the industry," he says, "but as far as affecting the energy balance, it will probably be 30 years before we have 15 percent or 20 percent of our energy from the sun."

Meanwhile, in his house in the Berkeley hills, Robert Hansen will be set during this summer's impending rolling blackouts, with all of his energy coming from his solar panels or stored in two days' worth of rechargeable batteries. "Renewable energy is the only way to go," Hansen says.