A shortage of solar-grade silicon still is having a big impact on solar companies, according to a panel of CEOs at the Solar Power 2007 conference in Long Beach, Calif.
"So far, the silicon shortage has hit us badly," said Suntech Power CEO Zhengrong Shi, adding the company is working to secure more silicon. "We hope it will resolve in the next two to three years."
Shi asked silicon suppliers to be "more considerate" and to act as part of the same team as solar manufacturers.
While Q-Cells CEO Anton Milner said it's not true that silicon suppliers are "the bad guys," he agreed that too much profit-taking is jeopardizing the industry.
Sharp produced about the same amount of solar equipment in 2006 as in 2005 because of silicon supply constraints. Kenedi said it is spending more than it wants to on silicon right now in order to help its customers grow.
Kenedi said the company is exploring technologies that use less silicon, such as thin-film and concentrating technologies.
To reduce the shortage's impact on SunPower's business, Werner said the company is working with both established and new players and signing contracts of varying lengths.
Hill said the shortage could last longer than previously expected, about another three years, and added that demand is far exceeding supply.
"We're going to see polysilicon come online later than everyone thought," he said. But when that changes, supply will exceed demand and spot prices will drop. "It will open up the solar market," he said.
When that happens, the industry will need to find pricing that makes sense for the whole supply chain and - depending where prices fall - there could well be overcapacity in some areas, compared with demand, Ruter said.
"I think we will see overcritical masses, where people say, 'Stop, I cannot take more quantities,'" he said. "The question is when do we have an overcritical mass in some parts of the value chain and how long does it take [to work out]."
But Kenedi said he's not worried about overcapacity.
"I know every one of my customers wants more product than I can give them and have a place for it," he said. "And there are lots of customers that we're [not addressing] yet."
He's also not worried that more silicon supply could open up more competition among solar manufacturers.
"Competition is great," he said. "It's going to make us all perform better, do more for our customers and bring prices to where they should be."
After the panel, Kenedi expanded. "I think there is still going to be a delta between supply and demand for a long, long time," he said. "But I think in the end it's going to be who can deliver the kilowatt-hours at the least cost. That's what's going to happen."
Shi said if prices are reasonable, there will "never be an oversupply" of solar products, and Ruter said cost will be the main key to success.
Werner, along with Ruter, said size matters. "Companies have to grow very, very fast over the next two to three years," Ruter said.