Roger Little of Spire Corp. is betting that his strategy for making solar power pay can overcome foreign competition, big oil, and lack of government support. Some call his plan "un-American."
If Roger Little manages to turn tiny Spire Corp. of Bedford, Mass., into a major force in the emerging world market for Solar-photovoltaic cells, his iconoclastic business plan should become required reading for corporate and political leaders currently fretting over the inability of the United States to comete in international markets. Little's plan takes what politicians and other business executives see as problems -- rapid technology changes, tariff barriers, huge domestic competitors, government-subsidized foreign competitors -- and either neutralizes them or turns them to his advantage.
Little's is a pragmatism not often found in the hubbub of political debate over how best to make the United States competitive in a global economy. In fact, parts of his plan sound downright unpatriotic, and in another time they may have been. But Little, 42, is betting his 13-year-old company that the world has changed, and while it may not be the way he would like it to be, he plans to deal with the world, profitably, just as it is.
Photovoltaic cells convert sunlight directly to electricity (see sidebar), a phenomenon observed by a French physicist in 1839, made workable by U.S. researchers in the 1950s, and given practicality by the 1974 decision of the OPEC oil cartel to begin raising the price of crude. The U.S. space program has used solar cells to power its satellites since 1958, but as an industry with commercial potential, solar photovoltaics is barely nine years old, and it is still sorting itself out.
In some respects, the development of the photovoltaic industry resembles that of other industries based on new technologies. For example, as it was with semiconductors, the United States has always been the technology leader in photovoltaics. Because of work done in the space program, single-crystal silicon solar cells made in the United States today are cheaper and more efficient than any others. The U.S. government and industry together have spent more on photovoltaic research and development than any other country.
Similarly, Americans have led in industry sales. In 1980, U.S. companies made 86% of the solar cells sold in the growing world market, according to Strategies Unlimited, a Mountain View, Calif., market research and consulting firm. And, as in other high-tech markets, the demand for solar cells is expanding at a healthy clip. This year's estimated sales of $110 million will be nearly 60% more than last year's and almost eight times more than in 1978. Estimates of future market size vary with the exuberance of the estimator. The most conservative put the sales level at close to $10 billion by the turn of the century.
But a major difference exists between solar photovoltaics and other new-technology industries. Most high-tech products -- TV sets, computers, fiber optics, robots -- first find markets in the developed countries of Europe, the United States, or Japan. African, South American, and Asian markets follow. Paradoxically, photovoltaic cells are more affordable in poor countries than in the developed world.
Let's say you have decided to build a new house for your family in the Northeast, where electricity is expensive compared with rates in the rest of the country. For $75,000 to $100,00, you could equip this new house with solar-cell arrays, power inverters, batteries -- everything you would need to be independent of the local utility. Even though various state and federal energy tax credits would reduce the net cost by several thousand dollars, there is still no good economic reason to spend that money when you can tap into the distribution line that runs along the road and buy all the power you can reasonably use for $700 or $800 a year.
The story is different in a poor African, Asian, or Central American country with only one or two urban centers and many small, scattered villages. Establishing a health clinic in one of the villages would require, among other things, a refrigerator to keep the medicines and vaccines fresh. One way to get electricity to the village to run the refrigerator is to start building a power-distribution grid reaching from the new central power station (which would have to be constructed) to every remote corner of the country. That will take a few hundred million dollars and, maybe, 10 years. Or, you could buy each village a generator and start trucking diesel oil from the refinery, which would also have to be built, to the village. OPEC would love you, and installing diesel generators would be cheaper and faster than building the power grid. But a small photovoltaic power system in each village turns out to be cheaper still, even at today's prices for solar cells.
This isn't to say that solar-cell uses don't exist in industrial countries. In the United States, solar-powered water pumps make and range land more productive, and solar-powered electric fences keep cattle on the right range. Solar cells work well in such remote locations as mountain-top microwave repeaters and ocean buoys. If and when solar cell prices drop 10% or more from current levels and can produce power that is price-competitive with electricity generated by fossil fuels and nuclear fission, the United States will become a huge market for cell makers. But that is in the indefinite future. Today's market is overseas, and some say that the Third World market is three times as large as the domestic sales potential at current prices.
Despite their lead in technology and sales, however, U.S. companies are losing market share to competitors in Japan and Europe. Strategies Unlimited reports that the U.S. market share fell from about 86% in 1980 to 75% in 1981 and an estimated 55% in 1982. Another industry analyst Paul Maycock, president of Photovoltaic Energy Systems Inc. in Alexandria, Va., predicts that by 1990 the United States and Japan will each have 35% of the world market but that the U.S. share will still be falling while the Japanese will be rising.
Why? Partly, U.S. business executives say, it is because their foreign competitors don't fight fairly. At a recent export seminar in Boston, sponsored by the U.S. Department of Commerce, a man reported that foreign governments pick up the travel tabs when their businesspeople visit foreign markets. "When," he asked, "will the U.S. government start paying my way?"
