Sustainable Energy rises on Innovation, Stimulation

In the world of solar power, Germany is Mecca. Solar energy now powers two per cent of German households. Despite the benefit of only half the sun of Arizona, Germany will produce more than half the world’s solar installations next year.

Germany is a massive controlled experiment for the solar industry worldwide, but has the experiment worked? In North America, government policy is still the primary driver of solar investment. Many point to Germany as the end game for this infusion. Others, however, say that even in Germany questions still remain about that industry’s health, save for the the presence of feed-in tariffs. They point to the tangle of confusion that resulted from the government slashing subsidies there.

For the better part of four decades, solar energy has come in and out of fashion more than corduroy. But lost in the boom and bust nature of funding for the nascent technology may be the fact that the industry has made consistent incremental improvements. Solar panels have become less obtrusive and efficient with the use of improved processes, and with the use of advanced materials such as silica crystal. Recent advances have spurred the meteoric rise of First Solar (NASD:FSLR) and, consequently, Canada’s 5N Plus (TSX:VNP), which supplies the Arizona giant with cadmium telluride cells. Innovation continues to spread; one US company is even developing a photovoltaic material that can be sprayed onto windows. Perhaps the renewed interest in technological advances is one reason Barack Obama recently replaced the solar panels that Ronald Reagan removed from the White House in the 80’s.

Shares of Sustainable Energy Technologies (TSXV:STG) are on the march today as the company finds itself at the intersection of public policy and, perhaps more interesting for investors, technology improvements in the solar space. The Company recently moved its head office from Calgary to Toronto to capitalize on that province’s Green Energy Act, which requires that solar panels must contain 60 per cent Ontario content in order to be eligible for a feed-in tariff.

Sustainable Energy has developed a patented process that converts a low voltage current into grid quality power. As the Globe and Mail’s Ian Merringer recently pointed out, this is important because the solar industry is, increasingly, moving towards parallel wiring as an improvement from series wiring. Series wiring is akin to the lights of a Christmas tree. Sustainable Energy’s technology removes the “weakest link” effect between panels that comes from snow, dust or shading effects. The company says that by reducing these effects it can increase the efficiency of a solar panel by five to fifteen per cent.

On Wednesday, Sustainable Energy announced a framework agreement with SRI Canada help build 10,000 inverters at its facility in Guelph over the next twelve months. After a series of plant closures and layoffs in the area many are hoping the news is part of a the area finally and permanently becoming a solar hotbed. Canadian Solar (NASD:CSIQ) recently hosted a job fair at its Guelph facility to hire 500 people to manufacture solar panels. The company, one of the largest solar players in the world , is seeing steadily increasing demand from markets outside of Europe.