REC Silicon pulls the plug on polysilicon production at Moses Lake plant

REC Silicon's Moses Lake, Washington facility. Courtesy: REC Silicon

Tucked into the folds in the flabby middle of an extended holiday respite, the future U.S. solar supply chain has sustained a significant setback.

REC Silicon announced Monday that it will cease polysilicon production at its Moses Lake facility in Washington State, on the heels of receiving the results of another failed purity test from its customer, Qcells. Once the shutdown process at Moses Lake is complete, REC Silicon will have completely stopped making polysilicon, an integral component of solar cells currently made in extremely limited qualities stateside. The company ceased production at its Butte, Montana site in February 2024.

An unsolvable problem

The shutdown of the Moses Lake facility is the unfortunate coda to a long string of previously disclosed efforts to improve the level of some key impurities in REC Silicon’s product.

The company claims the impurities primarily stemmed from post-reactor product finishing and handling systems. REC Silicon repeatedly delayed the timing of its first shipment while attempting a variety of mitigation tactics including changing contact materials, procedures, operating conditions and parameters, passivation measures and bypassing equipment, and bringing in third-party resources to assist in evaluating and mitigating the situation.

Despite its best efforts, REC Silicon was unable to fully rectify the issues and received an unsuccessful qualification test which it announced on December 17, 2024.

The customer (Qcells) made it clear it couldn’t wait any longer for delivery of a “product that consistently meets the requirements at the correct levels and can be delivered at the needed volume.” Therefore REC Silicon is now in advanced discussions regarding the cancellation of its contract, including the elimination of any penalties and a deferral of the repayment of the initial pre-payment.

After a strategic review addressing its financial and operational challenges, REC Silicon decided a shutdown of the Moses Lake facility would be the best way to maintain strategic optionality and financial flexibility.

What happens now?

There are currently no other polysilicon customers in the United States and limited customers outside of China. REC Silicon notes any other potential clients would not be options at this time due to product quality, market and contract conditions, and timing of potential needs.

REC Silicon says the equipment it uses to produce silicon gases will be maintained in a safe and recoverable mode that incurs minimal interim costs, allowing the unit to restart with reasonable notice. That will give the company the flexibility to capitalize on future customer demand for silicon anode or other gases while minimizing near-term operational costs.

Moving forward, REC Silicon will attempt to return to profitability by focusing its business efforts solely on silicon gases, a market in which the company believes it possesses clear strength, market positioning, and product differentiation.

REC Silicon expects a shutdown of the Moses Lake facility to start immediately. The process could take about three months and will involve workforce reductions. REC Silicon has sought additional financing options for support during this period of transition and to fund the shutdown process; the company says it is in advanced discussions with its largest shareholder regarding a potential short-term loan.

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