When, oh when, will the polysilicon shortage end? Solar insiders continue to have a wide range of answers to this question. It's an important one because the shortage has limited the growth of solar to far below demand. It also has boosted spot prices from $25 per kilogram a few years ago to as much as $300, according to a report by the Prometheus Institute. An end to the shortage could mark the beginning of lower prices, greater volumes and intensified competition among manufacturers.
But wait, don't silicon refineries take years to build? Given the time frame, you might think it's fairly clear when production will pick up enough to end the shortage.
It's not as though there was a paucity of announcements. Solar companies are signing long-term contracts to ensure a growing supply, and silicon manufacturers are practically tripping over themselves to build new plants. LDK Solar, Hoku Materials, Wacker Chemie and SolarWorld are among the many companies to announce more silicon production in the past few months.
Despite those efforts, the end is anything but predictable. While many new polysilicon plants are expected to come online by 2010, analysts such as Piper Jaffray's Jesse Pichel and Photon Consulting's Michael Rogol forecast that demand will grow much faster than the polysilicon supply. "The whole solar industry relies on 15 poly plants; we need 15 poly plants a week," Pichel said. "There is no end of the shortage."
And some are questioning whether the polysilicon plants under construction now will meet their expected completion dates, he said. The plants are very complex to build - "They're like little oil refineries," Pichel said - and it's unclear how the process is going because little public information is available, he said.
On top of those issues, a shortage of trichlorosilane (TCS) - the silicon, hydrogen and chlorine compound from which high-grade silicon is often made - has added another layer of complexity to the process, he said. Instead of buying TCS, companies such as MEMC Electronic Materials, Hoku and LDK all have announced they will make their own. Adding TCS production to their new silicon refineries could mean delays, Pichel said.
Further unforeseen complications could arise because the plants being planned today are much larger than any that have been built before, Pichel said. "We haven't seen 3,000 metric tons come out of any of these new players yet. We think a lot of the plants are going to slip."
Company forecasts put the end anywhere between two to five years out. B.J. Stanbery, CEO of thin-film startup HelioVolt, says the famine will ease somewhat in the next few years, but that silicon will continue to be in short supply until 2012 or later.
Suvi Sharma, CEO of Solaria, a concentrating-solar startup with a technology that claims to deliver more electricity using less silicon, says the shortage will last at least the three years more it takes to build the plants that have already been announced - and possibly longer.
Even though the amount of new polysilicon capacity in the works is more than the amount that has been built in the last 50 years, the plans announced so far are not enough for supply to catch demand. "Demand continues to grow and, once you're behind, it's difficult to catch up," he said.