There seems to be something of a rally in the air for solar stocks - but will it go on. so to say, like the Celine Dion Titanic song, on and on ?

I've got a feeling that this week has to be instrumental in deciding whether this is - or not - a dead cat bounce in an ongoing bear market. This week's Economist has an excellent bar chart for 2006 of renewable energy capacity by country. Germany, the world's solar leader, at the time still only had approximately 2.5 GW of solar pv, which with a load factor appropriate to their climate of just 10%, is an average of 250 MW year round or 2.1 terawatt hours in 2006, or about 0.4% of  Germany's electricity production in 2004, by my calculations.

By and large, I would say that no energy technology, is capable of exceeding load factor in a large nation's total electricity production. France is pretty much stuck at 75-80% nuclear for electricity. They'd like to go higher, but they can't because load-following nuclear plant is too expensive, so they make up the gap with hydro and gas. The other exception of course is hydropower - pretty much 100% in Norway.

So if Germany was to go on growing solar production, because there will never be summer sunshine 24 hours a day, there are no serious impediments to growth until they have a staggering 62 GW of solar power from which they will meet 10% of annual electricity production, or thereabouts. I think they'd be doing well if they got to 15 GW.

Still, for all that, the big future for the solar industry has to be making sales outside of Germany, lower silicon prices, possibly on the way by 2009 and continuous Chinese manufacturing reducing overall costs. If that is to happen, we will know in the next few years and finally be sure if the solar boom was truly warranted.