Sales of solar cells expanded more than 40 percent in 1997, according to a new report from the Worldwatch Institute. Solar power is now the world's second fastest growing energy source-at an average growth rate of 16 percent per year since 1990.

"World solar markets are growing at ten times the rate of the oil industry, whose sales have expanded at just 1.4 percent per year since 1990, " say the report's authors, Christopher Flavin and Molly O'Meara. "Solar energy may now join computers and telecommunications as a leading growth industry in the 21st century."

The roughly 800 megawatts of solar power capacity now in place is sufficient to run 40 million 20-watt radios, but still represents less than 1 percent of global power supplies. But as governments move to implement the Kyoto Protocol on climate change and replace fossil fuels, solar power is poised to benefit.

"If solar power is to reach its long-term potential, scientists will need to improve the technology and drive prices down, and governments must lower barriers to the industry's development," say the Worldwatch researchers.

Already, new technologies are lowering the cost of manufacturing solar cells, which are closely related to the silicon semiconductor chips found in today's computers. Several companies are focused on a new generation of "thin film" solar cells that require cheaper raw materials-and less of them. Scientists believe that such technologies can cut solar cell costs from $4,000 per kilowatt today to $1,000 in the next decade, which would make them a competitive source of electricity in many parts of the world.

In sunny climates, where air-conditioning drives power demand up on summer afternoons, this price would make solar power competitive with fossil fuel-based electricity, according to the report, which will appear in the September issue of World Watch magazine. Solar electric systems can also increase the reliability of the power supply in cities such as Chicago, which have recently experienced brownouts due to over-dependence on long-distance transmission lines and giant coal and nuclear plants.

Currently valued at about $1 billion a year, the solar business has recently attracted sizable investments by major energy companies such as Enron, Amoco, British Petroleum, and Royal Dutch Shell. These companies and others are investing in new manufacturing plants: factories announced over the last year alone could double global production of solar cells in the next few years.

A growing portion of the world's solar cells is going to meet the needs of ordinary households, according to Worldwatch. From tiny huts in rural Dominican Republic to trim suburban homes in Osaka Japan, some 500,000 homeowners are now generating their own power. For the 2 billion people worldwide who are not yet connected to power lines, solar energy is often the most affordable way to get electricity.

"In industrial countries, companies are now integrating solar cells into roofing tiles and even window glass, allowing homes and office buildings to effectively generate some of their own power, and to sell extra electricity back to the utility. In Sacramento California, some 420 homeowners already have rooftop solar systems, thanks to a program under which the local utility partially subsidizes them."

"Much of the recent growth in solar sales has been spurred by similar rooftop solar programs, including some at the national level," say Flavin and O'Meara. Japan is the leader, with some 9,400 solar home systems installed in 1997, and another 13,800 expected by the end of 1998. Generous tax credits and high electricity purchase prices have given the Japanese program a strong boost, encouraging major building companies to bring out new lines of solar powered homes.

The European Union and the United States have responded with "Million Roofs" programs designed to install a million rooftop systems by 2010. The U.S. initiative includes a proposed 15 percent solar tax credit as well as funds to support 25 partnerships with utilities, builders, local governments, and financial institutions. It remains to be seen whether Congress will provide sufficient funds to achieve these goals, but the programs have already attracted the support of private companies as well as state and local governments, encouraging investment in the industry.

"In the longer run, solar power has the potential to become a major contributor to the world's energy supplies-along with other energy sources such as wind power and hydrogen-powered fuel cells," Worldwatch concludes. "According to a survey in western Germany, existing rooftops could meet half the region's electricity needs. And a 1998 study by the oil company Royal Dutch Shell concludes that solar and other renewable energy sources could supply half the world's energy by the middle of the next century."

Worldwatch Institute: www.worldwatch.org