Does Big Oil want to become Big Sun?

The oil industry is carving out a large chunk of the photovoltaic solar cell industry. In addition to the 30 percent stake Standard Oil Co. (Indiana) holds in industry leader Solarex Corp., Atlantic Richfield Co. owns the No. 2 company, Arco Solar Inc., and Exxon Corp., Mobil Corp., Standard Oil Co. of California, Phillips Petroleum Co., Standard Oil Co. (Ohio) and Shell Oil Co. are working independently on photovoltaic technology. Exxon, in fact, last year dropped its efforts in other solar energy areas, such as solar thermal collectors, to concentrate on solar cells.

An American Petroleum Institute study in 1980 found that 83 percent of the $94 million invested up to that time by oil companies in solar energy research and development had been spent on photovoltaics. Mark Ethridge, an API policy development department staff member who did the study, believes the percentage is now higher, and says that oil company investment in photovoltaics now totals at least $178 million.

"It's likely that the majority of cumulative private investment in photovoltaics comes from oil companies," he says.

The reasons for oil industry interest in photovoltaics vary, but appear to be centered on the high-technology aspects of solar cells and the possible long-term payoff.

"I think the oil companies feel that photovoltaics is a high technology," says Joseph Lindmayer, president of Solarex.

"Photovoltaics is rather high technology. It's more interesting," Ethridge agrees. "Even though it doesn't appear to be very profitable in the short term, in the long term it may be much more so. I think that's the real reason."

Standard of Indiana began investing in Solarex about four years ago because, according to Gordon McKague, manager of corporate development at the oil company, "We're trying to keep our eyes open as to what's going to be available in the future, since we know that Mother Nature and the various governments around the world aren't always favorable to oil companies. . . . We decided to put some money into a small company and watch them grow and help them grow, and see where it leads."

For Solarex, Standard of Indiana's involvement as a major investor has given the company an important financial resource. The oil company has pumped money into Solarex over the years in return for additional stock, and was a key source of funds for Solarex's development of a "breeder" solar-powered factory in Frederick, Md. Says Lindmayer: "It's very difficult to match the oil companies' ability to put up money."