Cost of electricity in China makes solar wafer production pricey, says Canadian Solar

China-based Canadian Solar believes that polysilicon production expansions in the country have become overheated and that the cost of electricity in the country is too high to remain cost competitive with other countries that have lower electricity costs such as Canada, USA and Australia.

Citing Shi Zhengrong, Chairman of Wuxi Suntech Power from December 12, 2007, Canadian Solar said in a press statement that ‘polysilicon investment misfitted the nation.’
 
“As a matter of fact, it is not practical for China to produce polysilicon, mainly due to such a high electricity charge,” Shi Zhengrong is claimed to have said. “Therefore, I suggest that investors should seek more development opportunities in Canada, the US, Australia, and other countries with a lower electricity charge.”

Canadian Solar said that the PV market had attracted Chinese companies such as Baoding Tianwei Baobian Electric, Chuantou Energy Co., Leshan Electric Power and Sichuan Minjiang Hydropower into the polycrystalline silicon supply market in recent times.

According to Canadian Solar, China has now reached a potential polysilicon capacity of 30,000 tons and hints at a significant fall in polysilicon prices that will see Chinese suppliers struggling to remain competitive in a price war with lower cost producers from other countries, due to the higher electricity prices in China.

However, Canadian Solar reiterated that it was on schedule to build a 3,000-ton silicon wafer project in China with first phase equipment installation due in April 2008 and production ramp later in the summer of 2008 for its own solar cell requirements.