Solon AG has just produced a movie style commercial which I have to say is very watchable and very original.

Take a look at it here . . . click on "skip intro" then "watch the movie" - you need the sound on too.

I don't want to spoil things, but I do think their calculations involving 1.5 volt batteries are more than slightly out . . . such a battery should give you 3.75 watt hours. On average around the world throughout the year, let's say you get solar radiation of 1300 watts per square metre (or at least the hotter parts of the world). That should correspond to about 347 1.5 volt batteries - at that level of solar radiation, falling on the hour per square metre, for each hour. Also solar pv efficieny of around 15% means that only 52 of these batteries will get used.

So when you've seen the movie, perhaps you'll agree it's not quite what they portray, but you have to forgive their dramatic license !

Hoku Scientific, originally a fuel cell membrane developer, is now pushing ahead with its solar expansion.

This is a 2 step expansion plan which paves the way for some vertical integration;

Step 1: build a polysilicon production plant in Hawaii (where the company is located) to provide their own internal supply of the material for photovoltaic cell production as well as to supply the market in general.

Actually I think this is quite shrewd, although highly capital intensive- too many solar pv manufacturers have been held hostage by the supply shortage of silicon

Step 2: "Hoku Solar" - the solar division - then enters the photovoltaic market through the manufacture of PV modules derived from the polysilicon factory with an initial capacity of 30 megawatts per year beginning in the second half of 2008

Nevertheless, silicon wafer production is starting to pick up - it takes about 2 years to get a Fab up and running and quite a lot Fabs will be coming online in the next few years. Are we looking at a silicon glut in 2010?

I sometimes think that far too many German solar firms are far too concentrated on the German market. The solar PV market is still to develop internationally. That's why Solon AG's latest half-yearly figures showing a major increase in exports are for that alone - impressive.

Apparently, the export share of total revenue was increased to more than 35%. The development of the project business in Spain made a particular contribution where SOLON is currently installing a number of solar power stations with SOLON Movers.

Fresh from it's expansion into the Japanese market by buying MSK Corp, Suntech Power has just announced plans to spend around $60 million to build a research and development plant outside Shanghai, a senior company executive said on Friday.

In a market that is already hot, Suntech is really going places. The company has a 70 percent share of total production of its type of products in China and its global market share is expected to reach about 7 percent this year, up from 5 percent in 2005.

I'm convinced that Chinese manufacturing will pave the way for a much wider scale adoption of solar pv. China already has the lowest cost solar thermal technology by far.

That's why Suntech is definitely a solar stock to keep an eye on.

Phoenix Sonnenstrom AG advanced 56 cents today, or 3.5 percent, to 16.71 euros. The shares surged as much as 11 percent after HSBC Holdings Plc rated them ``overweight'' in new coverage on expectations for ``healthy profitability.''

Phoenix is in the wholesale side of solar power for complete solar power systems, solar modules and inverters. I always find it instructive where possible to look over earlier ratings and the reasons behind them - like this one almost exactly a year ago by Deutsche Bank. Then it said . . . Phoenix Sonnenstrom (PS4.XE) a buy with EUR16.60 target . . . a leading German photovoltaic distributor next to Conergy (CGY.XE), it says. Sees company well-positioned, with a strong brand name and a highly scalable business model. Believes political support and regulatory changes for photovoltaics should allow for 25%-30% market growth until 2010.

So it's interesting to read that their half-yearly figures released last week were 16.4% lower than the year before. But Deutsche Bank's 25 - 30% annual growth figure is looking spot on - 2005 sales were EUR 111 million and this year the sales forecast is EUR 140 million.

As I've commented on this site before, the silicon wafer shortage has been a major bottleneck for the solar pv industry, ramping up prices of silicon for solar module manufacturers. Now this bottleneck appears to be reaching an end . . .

News that Sunways AG has entered into a 10 year contract (from 2009) for 70 megawatts per year of solar cells is to be welcomed. It secures and fixes supply that much further into the future, freeing up resources for the company to concentrate on other parts of the business. This saves Sunways from buying silicon on the spot market - the worst value place to buy anything in times of shortage.

Q-Cells AG, has just raised its 2006 forecast after posting a 153-percent rise in first-half earnings.

The company, which is the 2nd largest solar cell market in the world after Sharp, also said it would increase its production capacity to a 432 megawatts peak by the end of 2007 after the completion of the first two expansion stages of a production line. At the moment, production is at 280 megawatts, so this is a big increase.

Germany's solar boom is clearly continuing - like all booms - much longer than anticipated. If there are clouds on the horizon, I'd identifiy these two threats;

i) A change of government (i.e. a working majority for Chacellor Merkel) which cuts back solar subsidies, specifically the feed-in tariff
ii) The rise of China as the lowest-cost solar cell producer

My guesstimate is that these will both start to bed in by 2010. It's not a complete exaggeration to say that other than machine tools, the rest of industry is still clearing out of Germany. Yet Q-Cells AG has a plant in Thalheim.

According to newratings.com, RBC markets yesterday produced a research note on Evergreen Solar. The analysts mention that the company’s total product gross margin is expected to decline to under 10% by the end of 2007 and this along with other issues is seen as grounds for concern.

For all that, what Evergreen has got absolutely right is to take a bet years ago on silicon prices rising and offering a "silicon lite" approach to solar power.Their patented string ribbon technology allows them to use half as much silicon - typically up to 60% of the cost of the raw material inputs.

If silicon prices had even just stayed at $15 per kilo as they were in 2000 instead of reaching $60 and sometimes much more, the massive increase in solar production would have seen some substantial price falls. Instead, we have seen solar module prices remaining fairly constant at between 5 and 6 dollars per watt, according to the Solar Buzz Index. And I might add, government subsidies for solar across the globe have played their own perverse role in this. They actually served to not make it in the interests of solar producers to reduce costs by crowding out more price competitive solar solutions.

The great solar silicon shortage - I am told - will last until 2008. So could we be heading for a silicon glut after then?

That really could give us some falling solar prices at last.

Evergreen closed down today at 8.66 a share.

Following an earlier post of mine about the ramping up of Chinese solar production, here's an example of how this is happening.

Suntech has just announced a formal agreement to buy MSK . MSK is a Japanese company, with (according to their website) has ". . . more than 20 years in the solar business. Our multidisciplinary team of solar engineers have designed and manufactured thousands of solar systems. Our range of high-efficiency solar modules feature excellent build quality and proven performance in the field".

So in other words, Suntech is buying into a lot of intellectual property and human capital in order to position themselves at the top end of the market.