At the Zenith of Solar Energy

(page 2 of 2)

Overseas Opportunities

Once these projects are operational, Zenith plans to start commercial sales in Israel in 2009 and then to go abroad, says CEO Segev, a 46-year-old entrepreneur who is one of the growing number of Israel's high-tech elite getting involved in renewable energy. The company is already planning a range of products that would be adapted for household, commercial, and industrial users—and even entire neighborhoods or communities. The price tag for a home-size unit is likely to be less than $20,000.

Zenith sees particularly large market opportunities in the U.S., Spain, Italy, Greece, India, and China. "In California alone, there are 6.9 million private homes that could potentially produce most or all of their own energy," Segev says. To compete abroad, the startup aims to link up with major energy players in other countries.

Until now, the Achilles' heel of solar panels has been the low efficiency of the cells that convert the sun's energy into electricity. Dozens of companies and research labs around the world have toiled to make photovoltaic competitive with other energy technologies, but so far, the best systems have an efficiency level of no more than 10%. As a result, solar panels are heavily subsidized by governments around the world.

Making Solar Energy Competitive

That's not a viable long-term solution. "Photovoltaic can't continue to exist on subsidies or it will remain a marginal form of energy," says Amit Mor, CEO of Eco-Energy, an Israeli energy consulting firm. Electricity produced by photovoltaics currently costs about 30¢ to 40¢ per kilowatt-hour. That's two to three times the average cost of power made from conventional fuels in the U.S. and Western Europe.

Concentrated solar power offers the hope of changing that equation. "The first generation of our technology should be capable of harnessing about 70% of the solar energy that hits the dish to produce electricity and thermal heat," says Faiman. With that type of efficiency, Zenith Solar says the cost of producing energy with its technology is close to that of conventional fuels.

It's too early to know whether Zenith Solar's technology will catch on the way solar water-heating did in Israel. But with the growing concern for global warming, and oil prices at record highs, the timing of the startup's entry into the market couldn't be better.

Sandler is a correspondent for BusinessWeek in Jerusalem .