Photovoltaic Price Survey

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Michael Rogol of Credit Lyonnais Securities Asia (CLSA) tracks trends in the solar market and has authored a report that grapples with the shortage of polysilicon and its meaning to the solar industry.

Rogol’s analysis concludes that for many years the only real use for polysilicon was to make silicon wafers for the semiconductor industry and as recently as five years ago the solar industry’s demands for the raw material were minimal. But times have changed.

According to Rogol in today’s marketplace 48 percent of the production of polysilicon is going to solar – 52 percent to electronics.  The expansion of silicon supply lags this increase in demand and production won’t catch up until 2008 to 2010.  Compounding the problem is that solar demand is growing considerably faster than the demand in the electronic sector.

This growth is reflected in the projections for global solar cell manufacturing over the next few years.  In 2005, silicon solar cell production was measured at 1.7 Gigawatts (GW) globally.  That number is expected to grow to 10 GW by 2010.  At the same time the electronic sector is growing at a five percent annual rate.

But growth rates don’t tell the full story.  The shortage has bigger implications for solar companies than for the electronic industry because silicon represents more than 30 percent of the raw material costs for solar cells compared to less than one percent of the cost of semiconductor products.

Although there are solar electric products such as thin-film technologies and concentrating solar power that don’t require silicon, the polysilicon supply constraint is significant since more than 90 percent of global solar cell production is silicon based.