Polysilicon prices continue to drop for solar

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He believes that the combination of lower polysilicon prices and higher efficiencies will shave approximately US$0.20 per Watt off the cost of a crystalline silicon (c-Si) module in 2012 alone. Prior made the prediction during a webinar held yesterday, unveiling a new 200-plus page research report from the company entitled, "Polysilicon 2012-2016: Supply, Demand & Implications for the Global PV Industry."

According to Prior, "The global polysilicon industry will undergo a major shakeout over the next two years, as the feedstock’s epic 2011 price declines … continue through 2013. With new entrants bringing capacity online and incumbent suppliers fulfilling expansion plans fomented in the PV demand boom of yesterday, global polysilicon capacity is forecasted to double by 2013 over 2010 levels."

He continues, "In today’s market of waning PV demand, this oversupply has already begun to open significant gaps in production scale and therefore cost structure between industry leaders and an increasingly marginalized group of new entrants."

While the polysilicon market is relatively competitive, the top 10 producers own some 70 percent of the market volume, Prior noted. They are: OCI, with a 2011 production volume worth 5.3 gigawatts (GW); Wacker Chemie (5.2 GW); Hemlock (4.9 GW); GCL Solar (4.8 GW); REC (2.9 GW); MEMC (2.1 GW); LDK Silicon (1.69 GW); Tokuyama (1.3 GW); KCC (846 megawatts (MW)); and Daqo New Energy (692 MW).

He added that even with 22 GW of the c-Si photovoltaics installed in 2011, "significant" oversupply remains at every stage of the solar value chain. According to GTM’s figures, in 2011, 29.8 GW worth of polysilicon was produced, 31.6 GW of wafers, 31 GW of cells, and 34 GW worth of modules.

The global sourcing of polysilicon is also skewed toward the bulge-bracket manufacturers from China, the U.S., South Korea, and Germany. Among these source countries, South Korea is an emerging player, Prior said. The map above shows global sourcing volumes of polysilicon as of 2011.

As GTM’s research also indicates, over the last four years, capacity growth has outstripped demand growth. Looking ahead, Prior predicts that the polysilicon market oversupply will likely worsen for several years, before it is corrected to the same growth rate as the solar and semiconductor industries.