Just as the world starts to embrace the realities of depleted fossil fuels and alternative energy resources, economic uncertainty is also playing a role. It's all very well to promote solar power, but companies are facing some challenges. And if the manufacturers are struggling, what is the potential for consumers seeking solar equipment?

In the past week, three major solar power companies forecast trouble for the year ahead. The current economic downturn means that investment has also dropped. Without necessary funding for new projects, along with cautious purchasing by consumers, companies are facing reduced demand.

Solar power is based on harnessing the sun’s energy, providing an alternative to energy generated by burning coal, gas, and oil. Solar power is emission-free, except for the initial manufacture of solar cells and panels, and completely renewable. It is seen as a viable way to create electricity without further damaging the atmosphere and affecting the global climate.

It is an international problem, affecting companies in Europe and North America including Q-Cells, First Solar, Inc., and Solon SE. As profits drop, it becomes harder to sustain business - despite the timeliness of alternative power. The issue highlights the dichotomy between environmentally focused companies and underlying corporate structure.

Even the biggest companies are feeling the pressure. Q-Cells is the largest solar cell manufacturer in the world, purchasing silicon wafers and processing them into cells. They then provide cells to companies that produce complete solar modules. Basically, solar power is based on atomic physics. Light is made up of individual photon particles. When these strike a conductor or semiconductor, electrons are activated - their motions generate electricity. Solar cells have silver contacts that conduct electricity out of the cell. Multiple cells are connected to form larger solar modules.

First Solar produces thin film photovoltaic cells that are more cost-effective than silicon versions. The company is the largest manufacturer of thin film solar modules, and they have achieved the lowest manufacturing cost per watt ($1.08/watt). But these facts do not compensate for a conventional corporate structure - based on turning substantial profits - and pressures due to trading on the NASDAQ stock market.

At some level, the problems illuminate a flaw in the current approach to alternative energy generation. Still not quite mainstream, the technology and availability are primarily dependent on external investors and market forces. However, increased government investment in alternatives would stabilize the situation and ensure a consistent flow of supplies and projects. Why are most governments still paying more for fossil fuel-dependent programs - such as fuel stockpiles and further technological processes - but not offering matching funds for forward-thinking solar power?

Although solar equipment is made by private companies, some places have legislated solar-friendly policies. For example, many European countries, certain Asian nations, and parts of the US now subsidize solar power. This allows conventional power companies to explore alternative energy sources. But without the necessary pieces of technology, nothing much will happen. The US Department of Energy runs research and development on solar power, as does Natural Resources Canada. It is certainly a step in the right direction. With financial instability on the horizon, it is another reminder that future innovations should not swing on mercurial market dynamics.

Photo credit: Dave Bullock