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STRATEGY 738 – SUSTAINABLE ENERGY FUTURES
Growth drivers in the U.S.Photovoltaic Market 
A comprehensive analysis of the current domesticPV industry
Joshua Bloom, Paul Gruber, Shyam Vishwanathan4/21/2009
 
 
TABLE OF CONTENTS
Introduction…………………………………………………………………………...pg. 1Technology…………………………………………………………………………….pg. 1-2Solar Markets……………………………………………………………………........pg. 3
Global Markets
…………………………………………………………………pg. 3
U.S. Markets………
……………………………………………………………pg. 3-4
Major Players…
………………………………………………………………...pg. 4-5
 
Industry Trends……………………………………………………………………….pg. 5
Technology Battle
………………………………………………………………pg. 5
 Convergence
……………………………………………………………………pg. 6
Cost Parity
……………………………………………………………………...pg. 6-7Government Subsidies………………………………………………………………..pg.7-9Other Factors…………………………………………………………………………pg. 9
The Economy: NRE Prices and Supply
……………………………………….pg. 9-10
 
Ecology: Climate Change
………………………………………………………pg. 10
Policy: National Security
……………………………………………………….pg. 10-11
 
California Case Study………………………………………………………………...pg. 11Conclusion: Growth Factors and Challenges……………………………………….pg. 11-12References………………………………………………………………………..........pg. 13
 
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Introduction
In 1954, the first silicon photovoltaic (PV) cells were developed at Bell Labs; it could harness6% of sunlight energy and convert it into electricity. Costs decreased dramatically throughoutthe 1970s, from about $100 per kilowatt-hour to $20. Still, in 1977, the entire world’sproduction of PV cells was enough to light just 5,000 one-hundred watt lightbulbs.
i
It was notuntil the 1980s and 1990s that the industry, thanks to its own technological initiatives, beganproducing big jumps in efficiency.
1
Since 2000, the industry has witnessed the entry of manysolar companies – most of them small to medium size; the price of solar energy has reachedremarkable lows of around $0.30 per kilowatt-hour, while its efficiency has grown hugely toover 22%. The industry has seen a large-scale consolidation of solar firms. U.S. governmentpolicies and renewable energy incentives have begun to play a more major role in reducing thecosts of solar energy, though a cap-and-trade scheme would greatly aid this endeavor. Thispaper focuses on solar PV technology, because it has shown very strong growth – around 50%over the past 5 years – and has been more widely developed than other forms of solar in the U.S.market.
ii
This paper explores the question: what are the major drivers for growth of PV solarenergy in the U.S.
Technology
Electricity is derived either through PV cells or concentrated-solar systems, which use solarheated water, oil, salt, or some other good conductor of heat to create steam, spin turbines, andcreate electricity. Silicon is the major component for PV cells, acting as a great semiconductor
1
Efficiency: in the case of solar, it is the % of solar energy converted into electricity.
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