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Sale of Arco Unit Casts Shadow on Future of Solar Energy Ventures

March 07, 1989|JAMES BATES | Times Staff Writer

But Arco Solar President Charles F. Gay disagrees. He said new markets, such as using solar to charge batteries in cars and recreational vehicles, are opening for Arco Solar and that the company is making progress in cutting manufacturing costs.

"I'm not worried about not having a sugar daddy to see us through. We are at the stage where we have developed some good markets for our products," Gay said.

Fears about the Arco Solar sale contrast sharply with fears by many in the early 1970s that oil companies would try to quash solar development because it threatened the oil business. Consultants and executives believe that Arco Solar's prospective sale is a clear sign that solar may not develop as a significant commercial business the rest of the century.

The market is small. Solar has become used largely in remote locations such as microwave transmitting stations, call boxes, navigational buoys or in remote areas in underdeveloped nations.

Tax Credits Expired

Domestically, most government-funded solar projects have ended. Nearly all of the tax credits created by the Carter Administration to encourage solar expired in 1985.

And the technology remains expensive for most consumers. According to distributors of solar energy systems, converting a three-bedroom home in Southern California to solar energy can cost about $20,000. Homeowners might not recover their costs in lower power bills for 15 to 20 years.

Anderson adds that solar is limited because it requires so much space for panels. To generate as much electricity as an average power plant would require placing panels over several square miles, he said.

But prospective Arco Solar owner Caldwell remains upbeat about the promise of solar technology. "If I couldn't convince people that this is a good investment and that they couldn't get a return on their investment, I wouldn't be doing what I'm doing," Caldwell said.

People familiar with the sale add that likely investors will include domestic utilities. Although foreign companies are unlikely to buy Arco Solar outright, they said, some may invest. Arco Solar has a joint venture agreement with Showa Shell in Japan.

Caldwell and others who are optimistic about Arco Solar's future are counting on development of its "thin film" technology. Arco Solar now makes photovoltaic cells by growing crystalline silicon modules in a lab, which are cut like a chunk of salami into wafers as thick as three $1 bills. Those wafers are sliced into four-inch-wide squares with rounded corners and mounted onto panels. Sunlight is absorbed and converted into electrical charges that are sent through thin wires.

The new thin-film technology involves coating glass with materials, a procedure that is much cheaper because it involves lower costs for materials and labor. One method involves coating the glass with a silicon and hydrogen mixture. Arco Solar believes that a semiconductor material with copper will be a highly efficient coating.

Gay, who has worked for Arco Solar for 11 years, believes that because of these developments, Arco Solar is only about two years away from profitability. "We are are ready to leave home and go out into the world and earn our way," he said.

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