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Solar Companies Are Scrambling to Find a Critical Raw Material (bloomberg.com)

Posted by msmash on from the current-situation dept.

Solar manufacturers are being battered by higher costs and smaller margins, after an unexpected shortage of a critical raw material. From a report, shared by an anonymous reader: Prices of polysilicon, the main component of photovoltaic cells, spiked as much as 35 percent in the past four months after environmental regulators in China shut down several factories. That's driving up production costs as panel prices continue to decline, and dragging down earnings for manufacturers in China, the world's biggest supplier. "There's just not enough polysilicon in China," said Carter Driscoll, an analyst who covers solar companies for FBR & Co. "If prices don't come down, it will crush margins."

5 of 134 comments (clear)

  1. The market corrects by OrangeTide · · Score: 3, Informative

    If the processing becomes profitable enough then factories will open up, perhaps outside of China. The finance situation has made poly-Si briefly (and artificially) cheap. If there is demand then people will pay more and investment can start again. Right now it's just too cheap to bother investing in a factory.

    --
    “Common sense is not so common.” — Voltaire
    1. Re:The market corrects by Bruce+Perens · · Score: 4, Informative

      Your economics are false because they work if you only count the return on excess solar power production, rather than replacement of grid power. In general a solar system will reduce your daytime power cost. They do this at the full retail price the power company charges. If you can't sell power back to the grid AND you can't store power for night-time use economically, then you lose out on your night-time power costs. But not day-time.

      Solar lease has poor economics where it is not possible to sell power to the grid, but that's because solar lease is an expensive way to get solar power. Ownership is better.

      --
      Bruce Perens.
    2. Re:The market corrects by ShanghaiBill · · Score: 4, Informative

      Are you sure the processing can be done in a clean, let alone profitable, way?

      It can and is done cleanly. Polycrystalline silicon is manufactured worldwide, including in the US. Outside China it is mostly higher quality "electronics grade" rather than lower priced "solar grade", but it is routinely done with more stringent pollution controls than was previously acceptable in China.

      Collecting the volatiles, and cleaning up and recycling the wastewater has a cost, but if everyone is required to do it, the cost can be pushed downstream to the panel manufacturers, and they will pass it on to their customers. This is not a solar showstopper, but it will make panels a bit more expensive.

      Does anyone else think it is silly that something made in factories is called a "raw material"?

  2. A highly purified material by thinkwaitfast · · Score: 4, Informative

    is not a raw material.

  3. 59% tariff on US polysilicon by Mspangler · · Score: 3, Informative

    RECSilicon, Wacker, and Hemlock would be very pleased to sell the Chinese polysilicon. All the Chinese need to do is drop the 59% tariff they put on it.

    REC can make polysilicon for less than $11/kg. Take the tariff off and they could restart the other half the plant in 3 or4 months. Currently itâ(TM)s shut down due to oversupply outside of China, which is caused by the Chinese tariffs. 80% of the demand is in China, but less than 80% of the polysilicon production is in China.

    By the way, this particular trade war trade war was started by Obama.

    P.S. RECâ(TM)s quarterly report has more information on the trade war. You can browse the old ones to see how it developed over the years.