Is Solar Ready for Prime Time?

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We all like to invest in hard assets. There’s something very pleasant about knowing that you own something real. That’s why we invest in things like gold silver, precious metals, rare ores or oil and gas.

As you think about putting your funds into new power sources, you may begin to wonder if solar or wind power is the way to go. Some people believe that solar power will begin to take over for fossil fuels soon.

While the United States has come to rely much less on foreign oil than it has in the past, fossil fuels are still a finite resource. We need to find ways to replace at least part of our fossil fuel usage. Americans also need to reduce our use of imported fuel.

In looking at the problem of energy freedom, many people think that solar energy is the best answer.

Over the last few years, solar energy technology has improved a great deal. There are solar farms that create enough power to run cities. Many private homes and some businesses also create solar power to meet their own needs.

As of now, solar panels are not very efficient. They require a lot of square footage to generate power.

Worse yet, solar panels generate power but they cannot store it. That means you need a backup source of power for times when the sun is not out.

Solar powered buildings need a battery, a generator or a storage device to provide power at night or on cloudy days.

To understand why, let’s talk first about how today’s solar panels work.

Current solar panels use the heat from the sun’s rays to excite the electrons in solar panels. These electrons leave their atoms and flow through wires to power electric devices.

It is the movement of electrons that actually creates the electricity. When the sun is not heating the electrons, solar cells do not make power. Once made though, the power may be stored in a battery if it is not used directly in homes and businesses.

The sun emits enough light to supply all of the world’s power needs in just a little over an hour per day. However, the current methods of catching the suns rays and changing them to useful power are not very efficient.

We need to look at new ways of using the sun to create and store the power in a form that we can use. To be useful, the method must also be cheap enough for people to want to use it.

Prices for the solar panels and their set up have fallen fast. In fact, the use of solar power has grown by about 20 percent a year over the past 10 to 15 years partly due to the lower prices.

Even though solar use is going up, our solar equipment is still quite inefficient. It is much better than it was even a few years ago, but it is still not where it needs to be to make solar energy the best choice for every home.

Government incentives have helped fuel the adoption of solar power in homes. States and energy companies also provide grants and incentives to help create demand for new solar installations.

There are a number of companies that will install solar panels on homeowner’s roofs. They collect the state and federal incentives. They lease the panels and other equipment to the homeowner. They then sell back some of the power at set rates. They sell the rest of the energy to utility companies. The sale of the excess power along with the government grants allows these companies to exist and earn a profit.

This plan also enables homeowners to install solar collectors with little or no money down and low lease payments. However, many people still object to the look of solar panels on their roofs.

The panels need to become less expensive, less bulky and better looking before more homeowners will install them. This work is in process.

The industry continues to look for new and better ways to harness the sun. New techniques such as Nano technology or even 3-D printing may soon help to make solar panels cheaper.

For example, nanotechnology can be used to create flexible rolls of solar panels rather than today’s rigid panels. This flexibility makes set up much easier and less expensive. It also adds to the number of homes whose roofs are right for solar collectors.

Unfortunately, nanotechnology cells are not as good as current solar cells at making power. That means you need more square feet of Nano collectors to make the same amount of energy.

Many colleges and research labs are working on solving the problem of more effective solar power. Some examples:

  • Los Alamos National Lab has made low-cost, nontoxic solar panels from copper sulfide.
  • MIT is studying solar cells made from sheets that are only a single molecule thick. They believe that this type of cell will produce up to 1000 times more power than current solar panels.
  • MIT is also looking at ways to make conventional solar cells at lower cost with more effective manufacturing methods.
  • Princeton University has developed solar cells that reduce loss of energy due to reflected light. They used gold Nano mesh to reach this improved function.

With so much research and so many great minds thinking about how to solve the problem, it’s almost certain that solar power will someday become a viable energy source for homes and businesses.

We are perhaps no more than a few years away from the use of solar power to fill most of our energy needs. However, solar is not likely to replace fossil fuel as the power source for cars and commercial transport in the near term.

At this point, it may be too early to think about putting your money into solar energy companies because no one technology seems to be winning the market.

The current technology is costly, bulky, hard to install and inefficient.

Future technology will be quick, inexpensive, flexible and efficient.

As of today, solar does not yet seem ready for primetime.

Buying oil, gas and coal will always be great investments because the world will continue to need and want to use these fuels.

We are many years away from finding a replacement for fossil fuels. For the investor, this means that continuing to invest in oil and gas makes perfect sense.

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