The future of solar energy keeps looking brighter in the United States. San Francisco lawmakers have just announced a rebate program for homeowners who install solar panels, or photovoltaics, on their rooftops. Out in the Nevada desert, one of the world's first solar power plants using trough collection went online in November. And despite falling stock markets around the world, investments in US-based solar companies like First Solar continue to be promoted as sound options.

The US market for solar power is so enormous that organizers of Intersolar, the world's largest conference for industry professionals, have decided to offer an Intersolar North America, to be held in San Francisco in July.

With all that potential for advancement, the US should have Germany shaking in its boots. But instead of taking away business, American interest in solar energy is giving the German market a healthy boost.

Room in the market

The original Intersolar conference, which came to an end over the weekend, has moved from Freiburg to Munich to accommodate a record 40,000 visitors and 1,000 exhibitors. And Q-Cells, the world's largest independent solar cell manufacturer, based near Leipzig, saw sales of nearly 270 million euros ($405 million) in the first quarter of 2008 -- an increase of 65 percent over the first quarter of 2007.

Indeed, despite the recent decision by German lawmakers to cut subsidies for homeowners with solar panels, things don't look to be slowing down in Germany's solar market any time soon.

So what is it about this damp, often-dark, northern country that makes it the frontrunner in sun-produced energy? Two words: research and technology.

Over the last decade, as the EU set lofty goals to reduce carbon emissions and Germany's decision to take nuclear power plants offline came to fruition, funding for solar research has increased hundredfold.

Research expenditures by private companies in the photovoltaic arena topped a whopping 166 million euros ($249 billion) in 2007 alone -- up from 6 million euros in 2000, according to the Bundesverband Solarwirtschaft, an association of German solar businesses.

Research institutes like the German Aerospace Center (DLR) have likewise opened branches that specialize in developing new, more-efficient solar technologies. The DLR's Institute of Technical Thermodynamics, for instance, has partnered with the Solar Institute Juelich (SIJ) to construct Germany's first solar tower, a concentrating solar energy plant that can power thousands of homes.

Towers of power

Though the technology is still in its infancy, researchers welcomed the advance. "It's of strategic importance for research and development to have a working power plant in the vicinity," Professor Johann-Dietrich Woerner of the DLR said when the plant went into construction in November.

Another forerunner in both solar thermal and photovoltaics energy production has been the Fraunhofer Institute for Solar Energy Systems (ISE) in Freiburg, Germany's sunniest city. At the ISE, researchers have increased the sun-capturing abilities of solar cells by helping uncover new semiconductor materials that can be used in thin-film technology. Scientists hope that thin film -- material layers that range from fractions of a nanometer to several micrometers in thickness -- will reduce the costs of photovoltaic systems.

The ISE has also developed creative integration techniques -- designing solar panels that can be hung from the facades of buildings instead of being set on rooftops.

The Fraunhofer recently opened shop near the Massachusetts Institute of Technology (MIT), one of the United States' leading universities, and is working together with MIT to pursue its solar energy research.

"Up to now the market for solar energy has been disproportionately low in the USA," said Professor Roland Schindler, executive director of the MIT-Fraunhofer Center for Sustainable Energy Systems. "In our work with the research scientists at MIT, we would like to create mechanisms which will support dynamic growth in this area."