Who will survive the solar energy shakeout?

To be sure, the company did post a roughly $4.8 million net income loss on $214 million of sales in this year’s first quarter. That was a “tough” period “for everybody because prices came down so fast,” says Brion Tanous, solar energy industry analyst at Merriman Curhan Ford, an investment firm in San Francisco. However, he notes that the bulk of analysts expect SunPower to bounce back to profitability soon. (It was due to release its second-quarter results on July 23.)

“We have made commitments to our investors and customers that we would lower our cost of solar-system installation 50 percent between 2006 and 2012,” Ms. Blunden says. “By 2010, we’ll be two-thirds of the way” toward that goal.

A solar giant

Sharp Corp., based in Osaka, Japan, is relying on its size and experience to survive in the business long term. It began mass-producing solar cells 46 years ago, initially to electrify Japanese lighthouses. For most of this decade, it claimed to be the world’s biggest producer of crystalline silicon cells and, by 2007, to have produced 2 gigawatts’ worth (1 million kilowatts) of solar cells – one-quarter of the world’s total PV output.

Clearly, Sharp benefits from the overall corporation’s mega size.

“From its parent, it has an extraordinary amount of resources,” says Mr. Bradford of Prometheus. The electronics giant “can deploy engineers and process capital on a scale that none of the rest of these companies can.”

Expanding beyond more traditional solar offerings, Sharp is pushing aggressively into thin films. According to published reports, it aims to secure a bigger than 50 percent market share of this sector by 2012. Already, it has an annual production capacity of 160 megawatts of amorphous silicon-based thin-film panels and is scheduled to open a new 480-megawatt-per-year plant in Sakai City, Japan, next March.

A low-cost leader

Based in Wuxi, China, the $1.9 billion SunTech Power Holdings Co. Ltd. enjoys some indisputable advantages: a huge supply of low-cost labor and a supportive banking system. “Our real strength is our ability to deliver products at very low cost that are also very high quality,” says Steve Chadima, SunTech’s vice president for external affairs.

Founded in 2001, it has grown with lightning speed, it says, to become the “largest supplier of solar panels in the world” with 1 gigawatt of PV cells and module production capacity. Taking on the high-efficiency market, the company is steadily converting to the use of a new technology it calls Pluto. The technology allows solar panels to convert 19 percent of sunlight hitting its monocrystalline panels, and 17 percent of sunlight with the polycrystalline panels, into energy.

To be sure, SunTech has incurred substantial debt used to fund its rapid expansion. But observers believe that issue shouldn’t dim SunTech’s long-term prospects: Looking into the future, China’s domestic demand for solar energy is widely expected to surge. If so, SunTech could be well-positioned to capture market share in China.

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