A very interesting piece here by J. Peter Lynch - Solar Stocks plummet on market turmoil - (not THE Peter Lynch of Fidelity). J. Peter believes that solar stocks were ". . . over bought at the time the market woke up to the potential problems in the sub-prime and other credit markets. The combination of a rapidly falling market and an over extended solar market sector was not a pretty sight."

Meanwhile, China Sunergy, has just posted a Q2 loss, with one analyst citing the global supply crunch of polysilicon as the main cause for the loss of $3.8 million, or 14 cents per ADS, after paying dividends to preferential stock holders.

A quick glance at the solar universe, suggests that solar stocks listed outside of America - the other 60% - are holding up pretty well. Europe's solar cheerleader, Renewable Energy Corp, can point to second-quarter profits ahead of expectations at both the pretax and operating levels.

Increasingly of late, I keep reading about nanotechnology being the key to solar power's breakthrough. A good place to follow this sort of story by the way is here - a website dedicated to news about nanotech with a sizeable section on solar nanotechnology.

I know there is a constituency out there that believes that solar is some kind of miracle energy source just around the corner. There has indeed been a feverish following of nanotechnology since the publication of Eric Drexler's 1986 book "Engines of Creation - the Coming Era of Nanotechnology". Sorry to spoil the party, but there are however a few hard facts that can't be ignored;

i) Today, solar photovoltaic power delivers a load factor of 10% in countries like Germany that can afford it.
ii) That's because there is no solar power at night and actually very little during cloudy days and winters in Europe
iii) It's a great mistake to concentrate on the manufacturing production cost per watt of this or that solar technology. In the long run, all that matters is the installed cost per watt and that remains high - $6 - $9 per watt.
iv) If you had the technology to produce solar power at a quarter of the cost of everyone else, would you sell it at that price too?
v) Solar power will not make the massive breakthrough until it reaches an installed cost of $1 - $2 per watt. Don't bet on that happening any time soon.

In that vein, I have just started leafing through my well-worn copy of Ray Kurzweil's "The Singularity is Near" again. A wonderfully optimistic book from a brilliant futurist who has a record of getting most things right. Yet looking at it again, I'm reminded that the world is full of broken promises about falling costs in solar power. On page 250 of the book, he quoted Martin Roscheisen of Nanosolar, who " . . . estimates that his technology has the potential to bring down solar-power costs to around fifty cents per watt by 2006, lower than that of natural gas. Competitors Nanosys and Konarka have similar projections."

Well, needless to say, this hasn't happened. I tend to think there is far more potential in the medium term for Concentrated Solar Power (mirrors heating up molten salts in deserts), an off the shelf cheaper technology that works and delivers industrial quantities of power, especially in what the Economist recently labelled the Dark Continent - because at night, unlike other developed continents, almost the whole of Africa remains dark, unlit by electricity.

According to a report by NanoMarkets - which you probably won't buy because it costs 1000s of dollars - the forecast rate of growth for thin film is way faster than that of the PV industry as a whole (put at 30 - 40% per annum, depending on who you believe). The world thin-film photovoltaics (TFPV) market is forecast to reach $7.2 billion by 2015 up from $1 billion today. A seven fold increase in 7 or so years is pretty amazing.

So after taking another look at our list of solar stocks here, I thought it would be helpful to list out separately, those solar players engaged in the business of thin film pv;

The Thin Film Solar PV Players

1. Daystar Technologies
2. Energy Conversion Devices
3. First Solar
4. PowerFilm Solar
5. Solar Integrated Technologies

What stands out to any solar industry observer, is that none of these companies are from Germany, or very involved in it - unusual, considering Germany is the mainstay of the global solar market. They also have next to no exposure to Chinese manufacturing, the solar low-cost manufacturing route.

That's because thin film is a very high tech bet on a high tech industry. And Energy Conversion Devices, notably, failed to convert the technology into sales a few years ago. Now there are new players, including the unlisted Nanosolar which has the added PR benefit of investment by google founders.

In another 3 years, I think we'll be able to see better how this all pans out and whether thin film will still be the future or as good as they say it is. It's just that at about this point, many observers are anticipating a possible fall in silicon prices, negating the need for lower efficiency, although less costly thin film in the first place . . . ?