Sunrise in the East

Sunrise in the East

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Sunrise in the East

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    Solar PV: Strong Developed-Country Roots

    Though silicon-based solar cells were invented almost 70 years ago, their exorbitant cost during the early years of development limited their usage to big-budget applications such as satellites and space exploration. But costs were driven down, and the development of solar PV accelerated in the 1970s as the Arab oil embargoes prompted increased government and private-sector investment in solar energy and as major oil companies, including Atlantic Richfield, Exxon, Mobil, and Shell, acquired solar businesses. These oil companies, along with electronics manufacturers such as Motorola and Westinghouse Electric of the United States and Sharp Electronics, Sanyo Electric Co., and Kyocera Corporation of Japan, began commercializing solar PV systems during the 1980s, and some continued into the 1990s. Corporate restructurings, recessions, and inconsistent levels of government support led a number of these companies to exit the market in subsequent years. However, BP, which had acquired Solarex Corporation through its purchase of Amoco, and the Japanese manufacturers remained steadfast.

    With the adoption of the Kyoto Protocol in 1997, the market for solar PV began to take off, particularly in Europe. Countries such as Spain and Germany introduced high feed-in tariffs to stimulate demand. Germany also instituted a powerful set of government subsidies and incentives. In response, a cluster of German manufacturers, such as Wacker Chemie A.G. (polycrystalline silicon, or polysilicon) and Siemens (equipment), emerged across the value chain. By 2005, eight of the top ten PV-cell producers and nine of the top ten PV-module manufacturers were either Japanese or European. (See Exhibit 1.) In addition, nearly 80 percent of PV production capacity was located in developed countries, close to sources of polysilicon and market demand.


    About the same time that European demand was increasing, a new set of companies from mainland China and Taiwan—including Suntech Power Holdings Co., Yingli Green Energy Holding Co., and Trina Solar—were emerging. They were only 10 to 20 percent of the size of the market leaders, but within five years they rose to near the top of the PV leadership list.