COMMENT
Phew! What A Scorcher!

Global warming is a reality. Since the beginning of the 20th century, Earth's mean temperature has increased by about 0.6 degrees Centigrade and the ten hottest years in the UK have all occured since 1990. Fortunately, we can take action to slow global warming, because it results primarily from the burning of fossil fuels, such as coal, gas and oil.

A good alternative to burning fossil fuels is to harness the power of the sun. Interestingly, solar power has been around for ages. It was very popular thirty years ago, which was roughly the time when global economies got into a sweat over high oil prices. Around that time, crude prices shot up from $10 to almost $40 a barrel.

Sadly, though, we have a habit of blowing hot and cold on solar power, depending on the likely savings compared with fossil fuels. But with oil prices now hovering at an all-time high and the twin threat of higher gas and electricity prices, attention has once again returned to solar power.

One of the main attractions of solar power is its ultra-low running cost. But apart from the potential cost savings, there are environmental benefits too. What's more, the UK government is feeling the heat from pressure groups to move towards a low-carbon economy. So that should mean even more government handouts for green consumers who are prepared to convert to renewable energy sources.

By the end of this year, the UK government wants 6,000 roofs fitted with solar panels. However, this is still some way short of Germany, which expects to have 140,000 roofs fitted with photovoltaic panels. Meanwhile, California is planning to add solar power to some one million homes!

For many consumers, one of the biggest deterrents of converting to solar power is the high set-up cost. This is estimated at around £16,000 for an average domestic system. But with the help of a grant from the Energy Saving Trust, the cost of conversion can be slashed to 'just' £8,000.

It is estimated that by converting to solar power, an average home can save around £100 in annual energy bills. While the payback period of 80 years may seem long, conversion to solar power has been said by some to add as much as 1% to the value of your home. For an average house, this could be as much as £1,500.

In terms of investment opportunities, there are only a handful of dedicated solar energy outfits listed on the London Stock Exchange. Ultima Networks (LSE: UTN) for example, is an accredited installers of solar energy systems. It is also involved in IT and telecom services. But at 1.6p, this penny-share set-up is only for the brave.

Recently floated Solar Integrated Technologies (LSE: SIT) looks more appealing. The company designs, manufactures and installs solar roofing products in Europe and America.

What makes Solar Integrated especially interesting is its expertise in Building-Integrated Photovoltaics, or BIPV. In other words, rather than just slapping solar panels onto roofs, its photovoltaic system is in fact the roof itself. This has won the firm many fans, which include Coca-Cola (NYSE: KO) and PepsiCo (NYSE: PEP). Unfortunately, Solar Integrated has yet to make a profit, but it recently announced a bulging order book of over £40m, which goes some way to explain its £50m market valuation.

It appears that solar power is at last discarding its unappealing cottage industry imaget. In fact, the industry is now reckoned to be worth over £2b annually and growing at 20% a year. Canny investors should therefore take note, because it is also reckoned that solar power could eventually account for 10% of electricity generation!