End in Sight for Silicon Shortage in Solar industry

Severe shortages of silicon have plagued the solar photovoltaic market over the past few years. According to a Frost & Sullivan press release a turnaround can be expected this year with polysilicon catching up with the demand . Quoting from the press release:

It was estimated that the demand for silicon feedstock neared 26,000 tonnes in 2004. In 2005 there was a rise in wafer production by nearly 7 per cent. However, this increase was not sufficient to keep up with the market need. In 2006 the shortage of feedstock reached a critical point affecting the production of solar panels and, consequently, the industry growth.

However, things are about to change. "We expect polysilicon supply to catch up with the demand already in 2008" – says Alina Bakhareva, Renewable Energy Programme Manager at Frost & Sullivan. "The majority of the new quantities will be supplied to the market by top 4 producers that are expanding their existing production capacities."

In fact, four top polysilicon producers are expected to add more than 17000 tonnes of capacity in 2008. This would represent over 50% increase over their current capacities.

On the demand side, demand from the semiconductor industry is expected to grow at steady one-digit rates. Demand for solar-grade polysilicon is expected to reach over 50% of the total demand for high purity silicon in 2008-2009.

This should bode very good news for the silicon solar PV cell manufacturers. With silicon supply no longer a constraint manufactures can ramp up production to meet demand and as a market driven supply chain develops the price of silicon should eventually settle out at a lower price. Then competitive prices and technical merits can let consumers choose what type of cells they prefer, rather than having to use what is available.  This more importantly means that solar PV can be a significant (10s of gigawatts) source of renewable energy in a shorter time period -- perhaps in as short as five years. - tfd