Here comes the sun: the force is with solar power

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Solar power, long regarded as one of those bright ideas that never quite made it, is finally being taken seriously by the British Government. It has just given a pounds 1m grant to help install solar panels on the roofs of 100 schools and colleges. The decision follows a volte-face last year when the Department of Trade and Industry abandoned its long-held scepticism and declared that solar energy had a better chance of producing commercially viable electricity than any other form of renewable energy.

Philip Wolfe, chairman of Britain's leading solar panel manufacturer, Intersolar Group, says solar power should be competitive with grid electricity in sunny regions in three to four years "and in Britain five years after that". He believes 10 per cent of UK electricity could eventually be solar- generated.

The Scolar Programme, under which the panels will be installed, is one of 24 ideas, from 530 submitted, that will receive funding under the Foresight Initiative. The Government's money will be matched by members of its sponsoring consortium, led by Intersolar and including the Open University, consulting engineers Ove Arup, Pilkington Technology and the PowerGen subsidiary Wavedriver.

Although each system will generate only a kilowatt - enough for a small electric fire - it will also produce data comparing power produced with temperature and sunshine levels. This will be fed via the Internet into a database that will be available to schools, academics and the solar power industry.

The Government's change of mind follows fundamental developments in the way panels are made. Solar technology was originally developed during the space race but was given a huge boost by the oil crisis, which persuaded oil companies and others to pour money into all forms of alternative energy.

An official UK report in 1976 declared, however, that the sun was implausible as a source of energy because the cost of making solar panels was so high. The silicon crystals that generated the electricity had to be carefully grown then wired together in an expensive and time-consuming process. As the oil price fell back, many of the big players withdrew, although a specialist industry survived to service the more obvious markets: remote areas of hot countries where, for example, solar systems could power electric fences.

A scientist at Dundee University, Walter Spear, had suggested in the Seventies that it should be possible to lay down silicon layers by using an electric charge to attract particles onto a sheet of glass. This had several advantages - the main one being that it used one-thousandth of the quantity of silicon to generate a unit of electricity and should thus be far cheaper.

Solar power was forgotten by the public in the Eighties, but a number of companies investigated Thin Film Silicon (TFS) technology and a handful invested in plants. These included: Sanyo, which now makes all the panels used in solar-powered calculators; Solarex, half-owned by Amoco; and a US group called Chronar, which set up factories in China, Yugoslavia (Croatia), France and Wales.

Chronar collapsed in the early Nineties and its Welsh plant was bought by Intersolar Group. Intersolar had been founded in the early Eighties by Philip Wolfe, who previously ran Lucas's solar power division. He was joined in the mid- Eighties by marketing director Philip Bouverat. The company provided generating systems for remote areas, and had a successful consumer products division: one in 10 cars in New Zealand has one of its Autovent solar-powered ventilation systems, for example. But until it bought Chronar's factory in Bridgend in 1993, it did not manufacture solar cells itself.

Although the Bridgend plant started full-scale manufacturing again only in 1994, it now produces 8 per cent of all TFS panels, making Intersolar the second biggest producer in the world, after Sanyo. As volumes have risen, unit costs have plummeted and, Mr Wolfe says, "we are coming down to a level where solar power is no longer just a nice idea." Because the raw material costs are small, cost per panel should continue to fall as rapidly as production rises.

Intersolar, which has a turnover of pounds 5m, says it is the lowest-cost producer of TFS panels. It exports to the Far East, where its panels are often incorporated in products that return to the West. But TFS is still some way from being able to compete with grid prices. Where there is plenty of sunshine - for example in southern Europe - solar electricity is four times more expensive than electricity from the system. In the UK the multiple is between six and 10.

As volumes rise, the gap will narrow rapidly. Intersolar is in the process of increasing its capacity from 1 megawatt a year to 3MW, which Mr Wolfe says should make it competitive in sunny areas. It will then move up to 10MW, and in the long run to 100MW - perhaps integrating production into a glass-making plant. At this stage, he says, solar power should be a serious rival to grid power in the UK.

But costs will not have to come down this far to bring solar panels within range of environment-conscious householders. "If you are building a detached house, it is realistic to generate all your power from panels on the roof," Mr Wolfe says. "At the moment, that would cost an additional pounds 30,000, but in the future it will be a tenth of that." When it is really sunny, he says, electricity could be fed back into the grid "and meters will run backwards".

Although Mr Wolfe believes the Government should include solar power in the Non-Fossil Fuel Obligation - a cross-subsidy that has helped wind power as well as the nuclear industry - he points out that heavy Government intervention in other countries has often done little good. In France and Germany, where there has been strong but inconsistent support for the technology, the industry is weaker than it is in Britain.