Today, as environmental awareness and rising oil prices put pressure on society, the potential of emerging solar energy technologies that directly harness the nearly limitless energy of the sun is increasingly desirable and economically feasible.

Harnessing Solar Energy

Harnessing solar energy involves both the direct use of the radiated heat as well as its conversion to electricity in the most efficient way possible. There are three categories that define every type of solar energy technology.

First, passive solar collection begins with the design of the building and includes optimal location, windows facing south, walls that absorb heat and light, and plenty of insulation. The heat and light that is collected is used in its original form of heat or light such as in a greenhouse. For example, the chapel on the Massachusetts Institute of Technology campus has no windows, but has been designed such that natural light reflects off the surrounding moat and into the room. Passive collection is much easier to include in new construction because retrofitting an existing building can be difficult and costly. Active solar collection implies converting solar energy to a more usable form of heat or electricity.

A second distinction is the type of energy an active solar system creates. Thermal applications include heat collection and heat-driven mechanisms, such as converting water to steam to power a steam engine that generates electricity. Electric processes use photovoltaic cells that create a moving electric charge that produces a direct electric current. PV panels have been used successfully on satellites and have a life expectancy of thirty years, making them an economically viable option for commercial use.

Finally, a third distinction in solar energy concerns the degree of concentration used in harnessing the suns energy. Concentrating systems engage mirrors and lenses to direct the sunlight to the area of collection. In some systems, parabolic trough-shaped structures of photovoltaic cells can even be powered to follow the motion of the sun allow for increased electricity generation. Non-concentrating systems are often simple flat panel collectors that are most commonly found as rooftop PV or as solar pool heaters.

The Solar Electricity Industry

In 2005, the amount of electricity generated by photovoltaic systems increased by 56% and resulted in 1,445 megawatts (MW) of PV being installed in the United States, Germany, Japan, among others. At the average of $8.00 per watt, this is a worldwide $12 billion investment in the solar energy markets in 2005 alone. Due to this market growth and increased capital for research and development, production costs for solar electricity are decreasing by five to seven percent per year.

Japan and Germany support the two largest solar markets due to targeted government subsidies designed to stimulate their growth. Japanese companies produced 47% of the PV cells manufactured globally in 2005, while Germany represented half of the installations. The US, once a leader in this technology represented less than 10% of both production and installations globally in 2005.

Worldwide, solar currently provides less than one percent of electricity demand but is projected to supply 26% of the worlds consumption by 2040. This industrial transition will occur as solar generated electricity becomes cost effective throughout the United States and much of the world.

Advantages of Solar Energy

Solar energy enjoys many environmental and economic advantages over other forms of energy currently used. These include:

• Environmentally Friendly
  • Non-polluting: Solar electricity generation produces no emissions while the current alternative, fossil fuel combustion, releases more than a pound of carbon dioxide emissions for every kilowatt hour.
  • Non-consumptive: The suns radiation is a limitless resource that can be collected without the environmentally destructive processes of mining or pipelines.
• Economically Beneficial
  • Cost effective: Solar generated electricity is already cheaper than conventional electricity in many major US cities. By 2027, PV will be the most cost-effective solution (even without any government subsidies or advantages from its environmental cleanliness) in nearly all areas of the United States.
  • Immediate and permanent savings: Properly financed systems will provide consumers with cheaper electricity from the day of installation.
  • Technological advancements: Improvements in solar technologies offer reduced costs and greater efficiency.
• Easily Accessible
  • Security: The price of solar electricity does not fluctuate with politics or supply speculation; there will never be a shortage that will cause solar electricity to become unaffordable.
  • Already distributed: There are no expensive transportation costs for solar electricity because the sun shines everywhere.
  • Leapfrogging: Solar electricity will allow sun-rich developing nations to leapfrog as they are doing with wireless telecommunications to a new energy architecture without having to install expensive land-based grids.

Using the sun's energy is no longer wishful thinking from idealists of environmental sustainability; it is the solution to the world's approaching energy crisis and an economic inevitability. We are rapidly moving toward a dramatic and dominant role for solar energy - a trend that should be encouraged by both policy makers and capital markets because, in the end, it benefits everyone.