Spending on green power soared by 60 per cent in 2007 as companies looked for alternative energy sources following huge cost rises in oil. The UN Environment Programme (UNEP), found that spending on green power hit $148 Billion in 2007. UNEP's Global Trends in Sustainable Energy Investment 2008 report, revealed that it expects spending on green energy to rise substantially by 2012. "Investment in the sustainable energy sectors must continue to grow strongly if targets for greenhouse gas reductions and renewables and efficiency increases are to be met," it said.

Solar energy is, perhaps, the first energy source that comes to mind when most people think of renewable sources of energy, but solar power is still a long way from being mainstream. It accounts for less than 1 percent of the world?s energy today.

There are two mainways to harness the power of the sun to generateelectricity: photovoltaic (PV), where sunlight is directly converted into electricity via solar cells, and solarthermal power. PV is a proven technology that is most appropriate for small?scale applications to provide heat and power to individual houses and businesses. Sunlight falls on a layer of semiconductors, which jostles electrons. This, in turn, creates an electrical current that can be used as a source for heat. Solar PV cells are already cost effective for powering houses and businesses in some regions.

Technological developments have reduced costs considerably over the last few years. However, largescale electricity production using solar energy costs about 22 cents per kilowatt?hour, significantly more expensive than its fossil fuel competitors and nuclear energy. This makes it more appropriate for specific applications rather than large scale power generation at this stage of development. Hopes to reduce these costs lie with newer technologies.

As is the case with wind energy, solar power has most traction in countries such as Germany, Spain, Cyprus and Japan, all of which offer incentives to improve the uptake of renewable energy sources as part of their implementation of a diversified energy policy. In Cyprus, more than 50 percent of hotels and 90 percent of homes have solar water heating.

-Solar energy makes use of a renewable natural resource that is readily available in many parts of the world.
-The process used to generate solar energy is emission free.
-Technological advances have reduced costs to a point that it can compete with fossil fuel alternatives in specific circumstances.
-The technology is scalable in that it can be used for domestic heating purposes or on a larger scale for commercial electricity generation, as solar water heaters are an established technology, widely available and simple to install and maintain.
Disadvantages.
The biggest barriers to increasing solar power generation are the cost, the amount of land required for large scale electricity production, and the intermittent nature of the energy source.
Outlook
Although wind power is more economical and has been more widely adopted than solar energy, solar power is the most flexible in scale and application. It also is widely available and an environmentally benign source of renewable energy.
It is currently a $7 billion per year business that is growing at 40 percent per annum, but we believe it has even greater potential for growth in the future.
Venture capital companies have increased funding in this area over the past few years, and there is a positive investment environment in both Europe and Japan for these types of companies. [Excerpts from Wells Fargo, Special Report Identifying the Opportunities in Alternative Energy.] Click here for more solar energy pros and cons.