Secretive Solar Start-up Aims for Silicon Production

Back in March 2006, Berlin-based Solarvalue AG, teamed with W&P Profil Maribor to bid for a controlling 90.78% stake in TDR – Metalurgija, a producer of calcium carbide and ferro-alloys, owned by Holding Slovenske elektrarne (HSE), Slovenia’s largest electric power provider for an undisclosed amount. The tender offer is under review by HSE, and Solarvalue expects bid approval is possible as early as September.

Solarvalue AG was established in June 2005 and has raised approximately Euro 15 million in share capital to date. Dr. Karoly Horvath is the founder of Solarvalue AG and controls about 71% of the shares through SV Holding GmbH. Falken Fonds is the second largest shareholder with about 16% of the shares, and the remaining shares are held by insiders. Solarvalue AG has formed a subsidiary, Solarvalue Production d.d., in Ruse, Slovenia, to produce Solar Grade Silicon (SGS) from high quality metallurgical grade silicon leveraging an existing arc furnace at the TDR d.d. facility. Solarvalue has developed a three-process approach to produce metallurgical silicon from low impurity raw materials and refine it into SGS. The Solarvalue SGS process has been validated by independent silicon consultant, Ted Ciszek, (, and Solarvalue has produced preproduction SGS samples at the facility. SGS production is scheduled to start at the end of 2006. Initial production volume targets or ramped capacity potential have not been announced. Solarvalue and their undisclosed strategic partners expect to invest about Euro 30 million to get SGS into full production. John Mott, a composite materials expert and entrepreneur, is slated to become Chief Operating Officer (COO) of Solarvalue Production d.d. to realize SGS production. Solarvalue AG has expanded their business strategy since a company presentation at the Fall 2005 German Equity Forum in Frankfurt. Solarvalue is now integrating the entire solar value chain, bidding for TDR d.d. to produce solar grade silicon, and acquiring Sunovation for polycarbonate modules and sales channels. Leveraging their solar grade silicon, Solarvalue believes they can exploit the solar industry’s polysilicon shortage and plans to develop international strategic partnerships with solar wafer, cell, and module manufacturers with idle production capacity. Solarvalue will market and sell their own branded solar modules to customers worldwide. Solarvalue co-founder Claudia Boehringer has remained as CEO to drive the growth and partner integration strategy, and Stefan Powels is Chairman of the Solarvalue AG Supervisory Board. Solarvalue AG has nominal plans for an IPO sometime in 2007 depending on the production ramp of solar grade silicon and market conditions. Assuming the tender offer is successful, Solarvalue has laid out aggressive plans to get solar grade silicon into production in three to four months. Solarvalue’s progress toward this aggressive goal can be judged by a number of objective milestones. I have based these milestones in part on the recent announcement by JFE Steel regarding their development and production of solar grade silicon from “metallic” silicon. After they upgrade or augment the TDR d.d. facilities with refining furnaces, Solarvalue will need to develop a stable process and deliver sample production SGS material to solar wafer and cell partners for qualification. Solar cell manufacturers will expect the Solarvalue SGS material to deliver the same cell efficiency and reliability as their existing products. Once the SGS material is qualified, Solarvalue will need to ramp production in order to become a relevant silicon supplier. Mainstream solar wafer and cell production requires approximately 10 metric tons of silicon feedstock to produce 1 MWp of solar cells. Although I do not have a clear understanding of the TDR d.d facility’s SGS production capacity potential, I would judge the success of Solarvalue’s production ramp by cumulative deliveries of the first 10 metric tons of SGS and then 100 metric tons. If Solarvalue can achieve all these milestones, by no means a certainty, they will need to implement an SGS production capacity expansion program for 500 to 2000 metric tons of annual production in order to drive a solar value chain for 200 MWp of solar module production. The SGS capacity target is dependent on Solarvalue’s plans for integration: complete SGS integration or a blend of integration, take or pay contracts, and spot market silicon. In my opinion, if the tender offer is accepted in September, Solarvalue will be lucky to complete the first milestone and deliver sample SGS material, in significant volumes, from a stable production process to solar wafer and cell manufacturers for qualification by the end of 2006. About the author… Edgar Gunther is seeking to expand his work into the solar photovoltaic industry and, in doing so, researches and writes occasional articles on the solar industry. Mr. Gunther has 15 years of experience in product marketing, management, and engineering delivering semiconductor and multimedia solutions with Lamina Ceramics, Liquid Audio, S3, AMD, and Commodore. Mr. Gunther received his B.S. in Computer Engineering from Lehigh University and earned an MBA in Marketing from the Villanova School of Business at Villanova University. More information on Edgar can be found at The information and views expressed in this article are those of the author and not necessarily those of or the companies that advertise on its Web site and other publications. The author may or may not have an interest in the companies described in the article, and the information therein has not been verified by for accuracy.
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