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Pricing Squeeze Pushes Silicon Suppliers To New Production Process

Pricing for solar PV polysilicon and wafers will plunge yet again in 2012, warns NPD Solarbuzz, but that may open up a door for a new breed of silicon material.

The pricing woes for suppliers of solar PV starter materials, polysilicon and wafers, are well documented. From several hundred dollars per kilogram a few years ago, pricing has been eviscerated due to overcapacity and overcompetition, now to under $30/kg (and we're hearing of sub-$25/kg now on the spot market). That's dangerously close to, if not outright well below, manufacturing costs for many suppliers. As a result, many have been taking capacity offline to try and stem capacity and thus prop up and even increase pricing again.

Unfortunately that climate isn't changing any time soon, warns NPD Solarbuzz, and thus "less competitive" manufacturers will continue to idle or shut down factories. (Just last week REC closed another multi-hundred-megawatt silicon plant in Norway, on top of several site closures last fall.) The net effect will be an industrywide decline in utilization rates in 2012, from 76 percent to 66 percent for polysilicon output, and 64 percent to 57 percent for wafers.

Industry revenues for solar PV polysilicon and wafers. (Source: NPD Solarbuzz)

Amidst the pricing pressure, though, is a ray of light for some polysilicon producers: "cast-mono" silicon, a hybrid of mono- and multicristalline ingots grown in conventional multicrystalline DS casting furnaces, a lower-cost method than the traditional Czochralski-grown (Cz) mono-Si ingots. Some of the more vertically integrated module makers — particularly those in China — started producing cast-mono wafers and modules last year, and Solarbuzz sees their output growing to 2.4 gigawatts (GW), about 8 percent of total PV wafer production, and rising to 25 percent of all wafer production by 2016.

Making these hybrid cast-mono products is not without its challenges, from addressing a wide range of conversion efficiency requirements to fixing its nonuniform appearance. Nonetheless, silicon suppliers "are very optimistic about cast-mono," seeing it as "a low-cost approach with relatively low technical barriers to achieving this goal," says Charles Annis, VP at NPD Solarbuzz. And this year, "we will see how the end market receives a strong supplier push of cast-mono," he adds.

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