The Fight To Harness The Sun

Tweet

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?"

"The U.S. government is short-sighted," says Ron Matlin, a founder and the chief executive officer of TriSolarCorp, in Bedford, Mass., which makes water pumps and other solar-powered systems. "Other governments," he says, "support their industries, but not ours. In Islamabad [Pakistan], I mentioned to a French woman that I was there on my money. She said that the French government had just asked her to do a market survey for a French company that we compete against." The key to capturing a local market often entails getting just one machine set up in a village or province. European governments, Matlin says, will often "seed" a market by giving the local government a solar-powered device. "The company sitting there with one machine working will be in a good position when the order cornes in for 500 more. But I've been in places where they said, 'I like that. I'd like to have one of those to check out.' I've said, 'The price is. . . .' And . they've said, 'Can't you get your government to give us one? The French will.' "

Former Vice-President Walter Mondale complained at a New York dinner party recently that "American business is not competing with foreign business but with foreign governments." Mondale is probably right, and Matlin and the man in Boston have a point, too. But what would Mondale do about the situation if he were president? The French, Germans, or Italians, with only two or three solar companies each, some of them nationalized, can easily promote individual manufacturers' products. Which of the 12 U.S. makers of solar cells and solar-powered systems would Mondale pick to push overseas, and how would the rest of the industry react?

Similarly, other governments can direct the path of technology in their photovoltaic industries, businesspeople say. Zoltan Kiss, president of Chronar Corp. in Princeton, N.J., notes that dozens of U.S. companies, including his own, research one or another of about 10 solar-cell technologies, while the Japanese just focus resources on amorphous silicon, which isn't yet as advanced as some technologies but is likely to produce cheaper cells than the single-crystal technology some U.S. companies are trying to perfect. By focusing, Kiss says, the Japanese get more research for their money. "But in this country," he says, "who would make that decision?"

The answer, of course, is that U.S. businesspeople don't want the government or anyone telling them what they can and can't research. The U.S. talent for innovation is a consequence of the undirected diversity of its innovators, and yet, as a practical matter, the government must play a role in supporting this research. The kind of role depends on who is in office that year. The Carter Administration's approach to promoting solar photovoltaics was to start throwing $1.5 billion into the industry's R&D and commercialization efforts over a 10-year period, beginning in 1979. Spread over scores of contracts with private companies, universities, and government laboratories, $1.5 billion would have been enough money to buy a little bit of this and a little bit of that, some part of which would probably have paid off.

The Reagan Administration, citing its free market commitment, stopped funding for anything but basic research and cut government support of the industry from $150 million in 1980to less than $30 million this year. The immediate effect was to pull the rug out from under most non-oil-backed small companies and to delay or jeopardize the potential commercialization of several promising advances. Presumably, if a Democrat is elected in 1984, the level will rise again. But you can't run a company, or build an industry, on a research base that yo-yos each year.

Another reason the U.S. industry is losing market share is that some parts of the industry are embarrassingly wealthy while others exist in virtual penury. The ones with the money aren't terribly interested in the Third World market for solar systems; the others can't afford the air fare.

In the photovoltaic industry's early days, around 1974 when oil-price boosts first shocked the world, entrepreneurial engineers working at big companies on solar cells for the National Aeronautics and Space Administration jumped ship. They started their own photovoltaic companies to supply the expected demand for this apparently attractive alternative energy technology. But as fast as these engineers founded them, oil companies bought them out. ARCO Solar Inc., today the world's largest producer of solar cells, began in 1975 as Solar Technology International Inc. In 1977, when Solar Technology had only eight employees, Atlantic Richfield Co. bought the business and renamed it. Exxon Enterprises Inc. bought the current third-place photovoltaic manufacturer, Solar Power Corp., from its founder, Elliot Berman, in 1975. Secondplace Solarex Corp., in Rockville, Md., is still run by founder Joseph Lindmayer, but Standard Oil Co. (Indiana) is reportedly the principal stockholder. These top three companies account for more than 80% of the U.S. industry's sales. Shell, Mobil, and Standard Oil of Ohio have also invested heavily in photovoltaic companies. Of about 15 U.S. companies producing commercial solar cells, 7 are either owned or controlled by oil companies or depend heavily on them for R&D funding.

 PREV  1 | 2 | 3 | 4 | 5  NEXT