The solar power market is intensely competitive and rapidly evolving. Over 20 companies worldwide produce solar power products. Solar power-focused energy pure-plays include Suntech Power Holdings, SunPower, First Solar, Energy Conversion Devices, LDK Solar, JA Solar, and Evergreen Solar. Several large diversified companies such as BP Solar, Kyocera, and Sharp operate divisions devoted to production of solar power tools.

Alternative energy subsidies offered by state governments in the U.S. are raising the profile of solar power domestically, but thus far, their impacts have been limited. Because of this aspect of the market, many solar companies have production operations abroad. Though listed on U.S. exchanges, Suntech, LDK Solar, and JA Solar are based in China. These companies save on manufacturing, labor costs, and tax payments by having international production facilities closer to a large portion of their customers.

A key challenge facing participants in the solar industry is the scarcity of pure silicon, or polysilicon, a key raw material used in the manufacturing process. The challenge is twofold: 1) polysilicon is generally scarce; and 2) solar power product makers must compete with the semiconductor industry for access to the raw material, which oftentimes drives up its price. Some expect a current polysilicon supply shortage to dissipate by the end of 2008, but there is little consensus: others think it could last until 2010 or beyond.

Nevertheless, prominence of solar power is continually on the rise. Industry analysis suggests that in 2006, solar power production surpassed the semiconductor industry as the number one worldwide "user" of pure silicon for the first time ever. In 2007, 62 percent more solar power products were installed worldwide than in the prior year. Currently, the main goal of solar power companies is to achieve "grid parity": to get to a point where generating electricity through solar power (in the absence of subsidies) is no more expensive than with traditional sources such as coal. While estimates differ as to when grid parity could be reached, a general consensus indicates that the year 2015 is a reasonable target.