Global solar-cell production grew 50.9 percent in 2007, reaching 3.7 gigawatts, Prometheus Institute President Travis Bradford said at a Greentech Media conference Monday.


The availability of more solar silicon than expected drove the "surprisingly strong" growth, he said at the Solar Finance & Forecast event.

According to the Prometheus Institute, producers had the capacity to make 30,075 tons of solar silicon, or enough to manufacture 2.71 gigawatts worth of solar panels, in 2007. That’s an increase from about 23,000 tons, which can make enough solar panels to produce up to 1.89 gigawatts of power, in 2006.

In November, the institute offered a lower forecast that predicted silicon makers would have the capacity to make 27,069 metric tons of silicon in 2007.

Part of that disparity comes from increases in silicon efficiencies, which mean that less silicon is needed to convert the same amount of sunlight into electricity, Bradford said.

Given that growth, as well as current solar panel prices, Bradford decried the current industry hype that spot prices for silicon have reached more than $400 per kilogram as ridiculous.

Earlier this month, DigiTimes reported that spot prices for high-purity silicon had grown more than 10 percent in the first few months of 2008 to between $450 and $470 per kilogram. But Bradford said prices would be much higher than the current rate of $3.75 per watt if those spot prices were accurate.

"Don’t believe the chatter," he said.

New entrants to the market, including a number of Chinese companies, have borne the brunt of high spot prices because they hadn’t signed long-term contracts setting fixed prices for silicon.

At today’s prices, Bradford said, Chinese companies "can probably afford somewhere [along the lines of] $120 per kilogram before they run out of profit, and that’s probably what they’re getting. … Is the worst of the silicon shortage over? Yes."

Bradford predicts those prices will drop as silicon capacity keeps growing. Even accounting for delays that Prometheus expects in the construction of some silicon factories, including plants from Solarvalue and Renewable Energy Corp., the institute expects solar silicon capacity to grow to 41,202 tons, enough to produce 3.88 gigawatts worth of solar panels in 2008.

In addition to silicon, thin-film production also has contributed to solar’s growth. Thin-film production increased 10 percent in 2007 to reach 434 megawatts of capacity, after growing 6.7 percent in 2006, Bradford said.

Prometheus expects thin films to grow to at least 3 or even 4.2 gigawatts of capacity by 2010, up from a previous estimate of 2.5 gigawatts. He added that this updated forecast might still be too conservative, since thin-film producers already have the lowest costs and the highest margins.

If demand drops in comparison to production, "the question is, ‘Who will run out of money first?’” he said. "The answer is the multi- and monocrystalline manufacturers."

Bradford said he expects solar-power system prices to drop by half over the next two years, reaching $4 per watt including installation and solar panel prices of just over $2 per watt by 2010.

With those prices, the Prometheus Institute expects global solar-panel manufacturers to reach more than 12 gigawatts of production capacity in 2010 -- up from a previous forecast of "well over" 10 gigawatts -- with an expected global market of between 4 and 10 gigawatts.