As I was quoted today in the Guardian, solar subsidies have had the perverse effect reducing the incentive of solar manufacturers to invest in non-silicon based solar panels. This might have prevented the silicon bull run keeping solar output prices high, whilst reducing their cost to the consumer.

That's why I think there's a lot to be said for solar investors to look at those companies that have eschewed silicon or greatly reduced its input - my guess is that this is a much better long-term bet if the political climate for solar subsidies turns sour.

Companies like Daystar Tech for example or Dyesol.

SAG Solarstrom - a solar stock from Germany - has blamed project realisation delays in Spain and Italy and sluggish demand in Germany reducing margins for a still sizeable Q3 sales figure of EUR 60 m.

The company CFO did say however that "In the period from July to September, we managed to reduce costs by approx. 15% by comparison with the first two quarters".

Breaking out of the cosy high-margin home market is a big challenge for German solar companies. To the best of my knowledge, none of them have done it yet - in scale.

Of all the alternative energy industries, solar is the most globally integrated. Just take a look at the latest deal between Norway's REC and China's Suntech - both multi-billion dollar solar companies.

Renewable Energy Corporation has won an order for multicrystalline silicon wafers from Chinese solar cell manufacturer Suntech Power Holdings, worth 1.2 bln nkr over the next five years - that's about $180m.

REC posts third-quarter results tomorrow morning.

Norway's Renewable Energy Corp has just received a huge order from BP.

"The agreement, which is structured as a take-or-pay contract, has a base value of approximately 2.7 billion Norwegian crowns," REC said in a statement.

The solar industry is continuing to boom but prices are not falling after several years. I'm wondering if the vast subsidies paid by Germany, Japan, California et al are responsible for that. Margins in the PV business are high and so there is no incentive to invest in lower cost pv technologies that would have excluded silicon for example whose price has quintupled.

Reinecke + Pohl Sun Energy AG have just announced that they will the targets for turnover and earnings for 2006 which were given by the Executive Board. Among the reasons for missing the prognoses are changing market conditions which have hampered the sale of photovoltaic plants.

Like most solar companies, it has ambitious growth programmes which in this case have not been met. There aren't many industries where the target is to double sales in the first 6 months of the year thought to be realistic.

Digging a little deeper though, it's intriguing to hear that a major resignation in recent days that can't have helped was because the person who had to resign, Mr Müller, had to go to prison. What for I've no idea yet (does anyone know? Please comment) but the company emphasises that it is absolutely nothing to do with them.

You need a lot of bucks to be in the solar business and you need plenty to buy it. So perhaps it shouldn't be such a surprise that Switzerland has its only niche solar industry.

3 S Swiss Solar Systems I would argue is at the right part of the production chain for a high cost country - the intellectual capital heavy part - producing solar production lines and the associated special machinery for the photovoltaic industry.

A board member of Aleo Solar AG has just claimed that "The current shift from a seller’s to a buyer’s market allows us to turn down quotes from solar cell manufacturers that are clearly too expensive even at short notice."

This is the first I have heard of a buyer's market opening up in solar cells. I've blogged quite a lot about silicon being a seller's market and assumed that solar cells (made from silicon) and are then used to make solar modules as being in the same category.

Maybe we are just starting to see the start of a silcon glut heralding lower solar prices?

I know that some people out there view the industrialisation of China with absolute horror. They forecast that this will tip the world into an environmental abyss and we will all die, etc.

What nonsense.

Ultimately, China is the solution, not the problem. Chinese enterprise and manufacturing will do a great deal to bring down costs of alternative energy technologies, as it is already.

So I was quite cheered today to read about how the Chairman of Suntech Power Holdings,
Shi Zhengrong, a maker of photovoltaic cells for solar panels is now the 5th richest man in China. Good for him. After all, who could humanely wish for a world where the Chinese stay forever poor?

News that Evergreen Solar has just signed a contract with Norway's Renewable Energy Corp for the supply of 7,400 metric tons of granular polysilicon over seven years beginning in 2008 is very promising.

It is this kind of long-term contract that has shielded the mighty semiconductor industry from the great silicon bull market. Maybe now we will start to see some stabilising prices and that will be a huge step forward for the solar industry.