Solar insiders are heading home Friday after Photon’s Photovoltaic Technology Show in Munich, Germany, came to a close.
As was the case last year,solar-grade silicon remained was a big topic of discussion at the show this year. The A bevy of Wall Street analysts and solar executives debated forecasts about the amount that would be produced and needed tried to figure out when the years-long shortage would end.
While some analysts, such as Frost & Sullivan, have predicted that the silicon shortage could be over as early as this year, others think have said it will take longer because asof a number of the delayed silicon plants expected to come online have been delayed.
One example is the Renewable Energy Corporation, which in February announced that the expected cost of its polysilicon plant had shot up nearly 20 percent from the $660 million previously expected (see Polysilicon Plant Costs On the Rise).
“Silicon raw- material manufacturing is complex and expensive to start up, and can be subject to delays,” said Paula Mints, principal solar analyst for Navigant Consulting. “I still expect silicon supply to ease, though not until 2009.”
Here’s some of the silicon news that came out of the European conference this week:
• Chinese solar-wafer manufacturer LDK Solar on Friday announced it had signed a deal to buy 1,450 tons of polysilicon from 2008 to 2011. The company didn’t disclose its supplier, but the deal is good news for LDK, which in March said it had secured 80 percent of the silicon it needs for 2008 (see LDK Defends Its Inventory Accounting). However, Chief Financial Officer Jack Lai said in a presentation Thursday that LDK might need to raise $200 millionup to $300 million to build its silicon plants and to expand its wafer production (see LDK Seeks Big-Time Capital).
• Chinese solar-cell and -panel maker Suntech Power Holdings said it has more than 750 megawatts of silicon shored up for the next year, according to a research note by Jeff Osborne, an analyst with Thomas Weisel Partners. Osborne, who viewed saw the announcement as positive for Suntech, estimateds that Suntechthe company will needs 848 megawatts of silicon for 2009. Previously, Suntech had only discussed its silicon coverage for 2008. In October, Suntech the firm announced it had made one of the largest deals ever for solar-grade silicon: an agreement when it agreed to buy up to $1.5 billion worth from Asia Silicon during a seven-year period (see Suntech Signs $1.5B Deal for Silicon).
• Silicon maker and wafer supplier MEMC Electronic Materials (NYSE:WFR) lowered its first-quarter revenue outlook Thursday. Among the culprits blamed were production issues, which led to lower silicon output, according to a research note by Piper Jaffray analyst Jesse Pichel. MEMC now expects first-quarter revenue to reach $500 million instead of $560 million, with a gross margin of about 52 percent, instead of 54.2 percent. MEMC also confirmed the loss of some technical talent, but has "identified the problem," according to Pichel. But filling such positions might not be easy in the cleantech industry. In February, famed venture capitalist Vinod Khosla claimed the United States simply doesn’t have enough energy scientists to go around (see Next Cleantech Hub: India?).
• Lazard Capital Markets analyst Sanjay Shrestha wrote that a number of silicon manufacturers are expanding production. As it previously announced last year, Hemlock Semiconductor Corp. is growing its production to reach 36,000 metric tons by 2011, with some of the expansion coming online in 2010. Meanwhile, Wacher-Chemie expects to reach 21,000 metric tons in 2010 and REC Solar said it expects to grow production to about 7,000 tons this year, from about 5,850 metric tons last year. Shrestha went on to say the cost of silicon production for new entrants will likely result in a "floor for silicon prices," provided that solar industry electricity prices are competitive with conventional electricity.
-- Editor Jennifer Kho contributed to this story.