Oil prices spur solar power popularity

LONDON - A number of solar power firms are considering floating their shares in the coming months as the soaring price of oil draws increasing interest from Governments trying to reduce their dependence on importing costly and polluting fossil fuels.

The largest markets for solar power - Germany and Japan - have already been boosted by state support, which has made relatively-costly products such as roof-top solar panels affordable to the public.

And despite the sharp rise in oil prices, most solar companies are likely to remain dependent on political support for the medium term, which exposes investors to political risks.

But solar cell maker ErSol Solar Energy and sources at PV Crystalox Solar and Renewable Energy Corp all said they were considering listing in Europe.

Solar cell maker Q-Cells may also seek an initial public offering, bankers familiar with the talks said, but Q-Cells declined to comment. The oil price crises in the 1970s spurred massive investment in renewables, and now with crude hitting US$70 ($101.83) a barrel, the sector is set for another boom, analysts said.

In Europe, interest in renewable energy sources has also been reignited by a drive by countries to curb their greenhouse gas emissions to meet commitments under the Kyoto Protocol on climate change.

"The main drivers of the solar industry are legislation, increased cost competitiveness to other energy sources, off-grid applications, and more expensive fossil energy," said Martin Hoerstel, an equity capital markets banker at Deutsche Bank.

- REUTERS