Solar Power Heats Up
By Joanna Glasner

in WIRED
[excerpts; emphasis added]

Drive through even the sunniest parts of the nation today, and you probably won't see more than a smattering of roofs decked out with solar panels. But with heating costs projected to rise sharply this winter, demand for electricity swelling and tax incentives for solar-powered homes taking effect, rooftop panels are likely to become a much more common sight in coming years.

Solarbuzz, an energy-research firm, estimates that the global market for solar-power system installations generated $6.5 billion in revenue in 2004 and predicts sales will nearly triple to $18.5 billion by 2010. Just last year, worldwide shipments of photovoltaic cells and modules, used in rooftop panels, surged by more than 50 percent, according to Strategies Unlimited, another research firm.

New tax incentives at the state and federal level and a boom in construction have boosted the solar energy industry in the past year. Tax perks will be a boost -- if they catch on: The high cost of installing solar electric systems has in the past kept many homeowners from investing in them. New tax breaks for homeowners and businesses that put in solar systems, however, promise to bring real costs down.

The energy bill signed by President Bush in August provides tax credits of up to $2,000 for homeowners who activate solar energy systems in 2006 and 2007, with potentially larger benefits for businesses, according to the Solar Energy Industries Association (.pdf). Industry insiders are also eyeing a bill pending in California: The Million Solar Roofs Initiative aims to place solar energy systems on a million residential and commercial sites -- including 50 percent of new home developments -- within 13 years.

"That'll be a game changer for California and the United States," said Ron Pernick, co-founder of Clean Edge, a research and marketing firm focused on clean-energy technologies.

Currently, the United States lags Japan and Germany in installing new solar power systems, something that Rhone Resch, the Solar Energy Industries Association's president, attributes in part to weaker tax incentives and lower conventional electricity costs. Resch believes tax incentives in the new U.S. energy bill will be particularly beneficial in boosting installations of solar thermal systems, which are used to heat water and typically cost less than $5,000 to install.

Some of the emerging applications that Resch views as promising, such as power-conducting plastic that can be incorporated into portable devices, are being developed by private companies . "That's where our largest increase in energy demand is coming from: the iPods and cell phones and portable devices we carry," Resch said.