Solar industry's challenge is to lower cost Intersolar trade show opens first U.S. meeting at Moscone Center

Charles Gay, general manager of Applied Materials� solar power division, said solar power in California currently costs about 30 cents per kilowatt hour, or 17 cents when federal tax credits for large solar systems are taken into account. By contrast, wholesale power prices in the state tend to fall between 8 cents and 11 cents per kilowatt hour, according to the U.S. Energy Information Administration. less Charles Gay, general manager of Applied Materials� solar power division, said solar power in California currently costs about 30 cents per kilowatt hour, or 17 cents when federal tax credits for large solar ... more Photo: Applied Materials Photo: Applied Materials Image 1 of / 1 Caption Close Solar industry's challenge is to lower cost 1 / 1 Back to Gallery

The solar power industry - in California and worldwide - is growing fast.

Now, it needs to focus on price.

That was the message from several speakers Tuesday at the opening of Intersolar North America, the first U.S. edition of the world's largest solar trade show. The show, at San Francisco's Moscone Center, runs through Thursday and is being held in conjunction with the Semicon West trade fair for the semiconductor industry.

Intersolar's organizers and attendees spoke on Tuesday of solar's bright future, its role in the fight against climate change and the need to wean the world off fossil fuels. But several of those in the show noted that solar remains far more expensive than other forms of energy. Only when its price approaches or beats the cost of power generated from fossil fuels will it reach its full potential.

"The faster we reach this point, the better for the world, and the better for the country that goes first," said Eicke Weber, a UC Berkeley professor emeritus who helped organize the show.

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No one can say for certain when that point will arrive.

"That's the $64,000 question," said Cathy Boone, senior director of global marketing for solar power at Applied Materials. "The entire industry understands we need to get competitive with the cost of fossil fuels."

Solar proponents have argued for years that prices would fall as production increased, but it hasn't happened yet. In fact, prices for solar panels rose for several years due to a shortage of silicon, the key material used by companies making the panels. Critics complain that the technology will never become cheap enough to be widely used in China, India and the developing world, thereby limiting its use as a weapon against global warming.

Charles Gay, general manager of Applied Materials' solar power division, said solar power in California currently costs about 30 cents per kilowatt hour, or 17 cents when federal tax credits for large solar systems are taken into account. By contrast, wholesale power prices in the state tend to fall between 8 cents and 11 cents per kilowatt hour, according to the U.S. Energy Information Administration.

One kilowatt hour is enough electricity to light a 100-watt bulb for 10 hours.

Gay said, however, that the long-awaited drop in price will arrive, just as it did in the semiconductor industry.

"As we've learned, by manufacturing to scale, price will fall," he said.

Certainly, the industry is growing in size. The Intersolar trade show itself is proof.

Intersolar began in 2000, in Freiburg, Germany, capitalizing on that country's keen interest in renewable power. Five years ago, 12,000 people attended. This year, Intersolar's European trade show drew nearly 52,000.

Expanding to North America was the next logical step. Weber had the idea when he attended Intersolar's trade show last year in Freiburg. He had returned to his native Germany after 23 years in Berkeley, and the trade show immediately made him think of the Bay Area.

"I thought, 'My God, this type of show we should have in San Francisco,' " said Weber, who now heads a solar research institute in Freiburg. "You can feel the excitement in the air here."

About 12,000 people have registered to attend this week's event, and 210 solar companies will hawk their wares.