SOLAR POWER:Solar power is expensive but demand and investment are growing, writes Barry O'Halloranin the second part of a series on alternative energy
Enough sunshine falls on the dreariest part of the State during the shortest and dreariest winter day to provide all of Ireland's energy needs for a year. The only problem is that you can't bottle it.
The first technology designed to attempt this was developed in the 1950s. Since then, advances have led to modern systems that convert the energy to electrical currents by capturing sunshine in cells made with silicon.
They are still not efficient enough to be able to exploit all the energy generated by the sun, but solar power is popular in some parts of the world, and the industry has captured the attention of investors.
Last year, three Chinese companies - JA Solar, LDK Solar and Yingli Green Energy - raised over $1 billion (€681 million) between them by floating on New York's Nasdaq exchange, the market most closely associated with technology and innovation.
JA Solar followed up its initial float, which raised more than $200 million in February, with a second offering in October that earned it $197 million.
Yesterday, its American depositary shares were trading at about $61 - a multiple of the $17.80 at which the stock closed on the day it made its Nasdaq debut.
The companies are not involved in the power generation side of the industry, but rather in the design and manufacture either of solar cells or their components.
Much of the recent activity in the sector is around this element of the business. Before the Chinese began to make inroads here, Germany was the big player, and is home to many manufacturers, including market leader Q Cells.
The success of these businesses will be driven by demand for their products, which in turn depends on the rate at which these devices are bought and installed.
According to Davy analysts Jack Gorman and Mark Healy, the industry's European association believes that, under favourable policy conditions, the level of installations could increase to 5,550 megawatts (MW) - equivalent to a medium-sized power plant - by 2010, four times as much as it was in 2006.
They point out that, even under a more pessimistic scenario, the market will double over that same period.
In common with other forms of alternative energy, many European countries provide support in the form of guaranteed payments for electricity produced by solar power.
For example, Spain, where Cork-based Quintas Wealth Management invested in solar farms last year, provides strong support.
However, these supports are not present in all markets, including Ireland.
The main problem for solar power is that it is expensive when compared with conventionally produced electricity. Manufacturing solar panels is costly and uses a lot of energy, which raises questions for environmentally conscious investors.
You can get around at least some of these problems by locating solar farms in areas that get a lot of sunshine; ultimately that means Spain and California are likely to be favoured over Donegal.
