Wouldn’t it be great if rooftops all over the country generated electricty from the sun? It is rumored that Nicola Tesla, father of alternating current was given funding by American tycoon J.P. Morgan. Tesla’s dream was free energy for all but J.P. said, “That’s all well and good Mr. Tesla, but where do I put my meter”.
I present a trade magazine article illustrating a barrier to implementing such an idea. Read on while I translate the businessease doublespeak and compare it to other electronic business successes stories.
http://sst.pennnet.com/display…
Global warming and peak oil have renewed concern for the enviornment and have apparently renewed an interest and funding of companies making solar cells. Who is in the way this time? The business analyist.
Here we go.
75 companies funded with billions in public money to increase solar capacity.
Stephen O’Rourke, Managing Director, Deutsche Bank Securities says,
That creates a daunting specter of possible oversupply within the next couple of years.
“Daunting specter of possible oversupply”. Oh, I see too many solar panels and gee, the price might go down too much. He may have a valid business point in that one would not want new solar manufacturers to fold.
The analysis continues with this.
The argument that the industry enters a sustained oversupply period and shakes out quickly is too simplistic. A more likely scenario would be the emergence of an oversupply situation of polysilicon modules which will drive meaningful module price declines. This will spark demand, potentially consuming available supply and rebalancing supply and demand at a much lower price point. This dynamic could occur iteratively as additional production floods the market, creating a situation in which the industry flirts with oversupply for a prolonged period, “rescued” by elasticity of demand. Such a dynamic could drive demand much higher, effectively consuming supply.
The real problem is solar cells are actually a low profit margin item compared to Pentium chips. We do however have no problems with cell phones, surveillance equipment, tazers, Star Wars type spy satellites and internet monitoring equipment.
So before we even get started Mr. ORourke has it all analyzed. You get to freeze in the dark and I get my Apocalyptic horse ride!