Solar power shines bright in Silicon Valley

Solar's expansion in Silicon Valley won't necessarily create lots of manufacturing jobs in the San Francisco Bay Area. Like the microchip industry, the solar sector is moving production offshore to low-cost countries, mostly in Asia.

Only about 100 of SunPower's 1,300 employees work at its San Jose headquarters; the rest work at a new manufacturing plant in the Philippines.

Silicon Valley venture capitalists are also taking an interest in solar, part of their growing interest in "cleantech" companies that develop environmentally friendly technologies.

About $1.4 billion in venture capital was invested in cleantech ventures during the first six months of this year, and $1.6 billion was invested last year, according to the Cleantech Venture Network.

About one-third of that money was invested in Silicon Valley, said Carl Guardino, who heads the Silicon Valley Leadership Group.

"We all realize that green is gold," Guardino said. "Venture capitalists are betting with their wallets that cleantech will play a significant role in Silicon Valley."

The valley's rush to solar isn't without risk. The solar industry must bring down costs significantly to persuade homeowners and businesses to install solar systems on-site rather than just buy electricity from the local utility.

The industry also faces a worldwide shortage of polysilicon created by the rapid expansion of solar. This year, for the first time, the solar industry is expected to consume more silicon than the semiconductor industry.

And some valley solar startups are moving beyond silicon. Miasole of San Jose and Nanosolar Inc. of Palo Alto are developing thin-film solar cells made from alternative materials like copper and selenium. Nanosolar has raised $100 million in venture funding and plans to build what it says will be the world's largest solar-cell factory in the Bay Area.

Solar still makes up far less than 1 percent of the world's electricity supply, but it has grown by more than 40 percent annually over the past five years, and today is worth about $15 billion globally, according to Rhone Resch, president of the Solar Energy Industries Association.

"The solar industry is the next great high-tech industry," Resch said. "Our estimate is that within 10 years solar will be the lowest cost option for electricity in the U.S."

State governments from Arizona to New Jersey are creating programs to reduce emissions of heat-trapping gases such as carbon dioxide and expand use of carbon-free energy such as wind and solar.

California hopes to overtake Germany and Japan as the world's largest solar market with its "Million Solar Roofs" program, which provides $3 billion in rebates to consumers who install rooftop panels. The state's landmark global warming legislation, which seeks to reduce greenhouse gas emissions by 25 percent over the next 14 years, is also expected to dramatically expand the market for solar power.

"With the help of Silicon Valley," said Bernadette Del Chiaro, clean energy advocate for Environment California, "California can become the Saudi Arabia of the sun, exporting new technologies for the rest of the country and world."

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