Polysilicon problems to persist, according to new report from Bernreuter Research

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

Good news for the c-Si solar cell producers and module manufacturers is that overcapacity in polysilicon production should continue as major producers continue with capacity expansion plans and new entrants, especially in China, ramp initial plants. According to a new report from Bernreuter Research, entitled ‘The Who’s Who of Solar Silicon Production,’ despite strong solar module demand, pressure on the silicon prices rising will likely be limited this year.

Bernreuter Research estimates that global polysilicon production will reach 250,000MT in 2012, with approximately 80,000MT produced in China alone, making up about one-third of global production.

Johannes Bernreuter, founder of the research firm, told PV-Tech that polysilicon supply/demand dynamics this year would translate into spot pricing in the range of US$45 to US$50/kg.

“In 2011, I expect that a significant volume in China will probably be produced at manufacturing costs below US$35/kg, and that the spot price will fall to this level– whether by the end of the year or earlier,” commented Bernreuter.

However, this price decline will cause problems for many of the new and smaller polysilicon producers, according to the research firm.

“The Chinese polysilicon industry will undoubtedly become an important player in the global market,” noted Frank Haugwitz, photovoltaics consultant in Beijing and coauthor of the report. “However, about 20 smaller manufacturers, which had an annual production capacity of only 1,500 MT or even less at the end of 2009, are the first potential candidates for consolidation.”

Bernreuter clarified the issue of ‘consolidation,’ suggesting many would simply go out of business. This is due only in part to manufacturing cost disadvantages compared with significantly larger competitors, but can also be attributed to smaller producers’ financial strength and ability to survive a period of loss-making while prices fell below manufacturing costs.

“In this sense, Chinese manufacturers enjoy an advantage with all the money they have reaped from the government’s stimulus program. Nevertheless, a nominal production capacity of only 1500MT or even less at the end of 2009 is simply not an economical scale,” he noted.

Bernreuter explained that, as a rule of thumb, smaller start-ups would be able to achieve production costs of above US$40/kg in the first and second year of ramp up. All those who are still in this phase in 2011 will start to suffer financial problems.

What isn’t clear yet is whether the expected consolidation will have a meaningful impact on polysilicon overcapacity and potentially lead to a rise in prices. Solar energy demand dynamics is also a contributing factor, which because of its volatile position makes such a call even more difficult.

Perhaps more controversial is the report’s claim regarding different technologies fighting to compete with the traditional Siemens process for polysilicon production.

Bernreuter Research examined nine alternative production methods to the standard Siemens process, noting that “none of them will challenge the Siemens process in the short term. In particular, fluidized bed reactor technology has not delivered on its promise of lower manufacturing costs.”

Bernreuter believes that the high capital investment costs of developing and scaling FBR processes are at the root cause of the technology not meeting a 30% lower manufacturing cost compared with the Siemens process. The resulting high depreciation drives up total manufacturing costs, according to the analyst.

However, he recognised that both Wacker and REC have functional reactors now, so the technical challenges are behind them.  It should be noted that MEMC has been using the FBR process successfully and was a pioneer in its use.

As far as upgraded metallurgical-grade (UMG) silicon, the research firm projects the technology will only play a marginal role with a market share of less than 1% through 2012.

28 September 2021
Solar Solutions International is the largest trade show for solar energy in Northwest Europe. Now the solar market has grown up, it's time for the next step. Solar Solutions International displays more than 500 innovations and over 100 practical seminars concerning the latest in energy storage, smart products, and an ever evolving array of solar panels. As an exclusively B2B trade show, Solar Solutions International offers both exhibitors and visitors the chance to network at the highest level. Duurzaam Verwarmd, the largest trade show for sustainable HVAC technology in the Benelux, is held simultaneously. This way your one visit gets you up to date with all of the developments in both sustainable energy and heating.
6 October 2021
Intersolar Europe is the world’s leading exhibition for the solar industry. It takes place as part of The smarter E Europe – the continent’s largest platform for the energy industry. Under the motto “Connecting solar business,” manufacturers, suppliers, distributors, service providers and project planners and developers from around the world meet in Munich every year to discuss the latest developments and trends, explore innovations firsthand and meet potential new customers.
6 October 2021
The future is bright for a new era of US solar and storage, and the 8th annual Solar & Storage Finance Summit will provide opportunities to discuss solutions to the industry’s challenges and provide a networking platform designed to bring together the top minds in the industry to do business. With a mix of high-level, informative presentations and panels, a stellar cast of speakers and audience members with deal-making capacity, the 2021 edition of the event will be a sell-out success.
18 October 2021
Intersolar South America, South America’s largest exhibition and conference for the solar industry, takes place at the Expo Center Norte in São Paulo, Brazil on October 18–20, 2021, and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. At the accompanying Intersolar South America Conference, renowned experts shed light on hot topics in the solar industry.
19 October 2021
This year’s EV World Congress will hold a special role, not only as the first live EverythingEV event in over a year – a chance to renew your connections and re-engage with the EV sector face to face – but also as a chance to share insight and inspiration as world starts to look towards move on post COVID towards hitting ambitious decarbonisation goals in 2030 and beyond. As ever, we will be bringing world leading organisations, cities, and technology providers to the UK to inspire EV innovators, and delve into the challenges facing the sector as the UK looks to revolutionise road transport.
20 October 2021
Utility-scale solar is evolving, shaped by higher power modules and demand for increasingly lower levelised cost of electricity (LCOE). Those trends are also changing project requirements elsewhere, with inverters capable of delivering high power density and power capacity in strong demand. In this webinar, FIMER will detail how its innovative high-power, multi-MPPT string inverter and modular conversion solution can both meet those demands and transform the utility-scale solar sector for the better.

Read Next

September 23, 2021
A project that bids to combine up to 20GW of solar PV with the world’s largest energy storage battery and a 4,200km-long subsea power cable has moved a step forward after Indonesian authorities greenlit its proposed transmission cable route.
September 23, 2021
US national residential and C&I solar plant performance assessment company Omnidian has completed a US$33 million Series B raise.
September 23, 2021
US developer Clearway Energy Group has signed a virtual power purchase agreement (VPPA) with Toyota in North America to supply the company with 80MW of power, accounting for 8% of the company’s regional operations
PV Tech Premium
September 23, 2021
Backed by a new heterojunction module factory in Florida and the expansion of its production plant in Minnesota, solar manufacturer Heliene is looking to take advantage of US policy support to meet increasing demand for American-made PV equipment. Jules Scully discusses the company’s growth plans with CEO Martin Pochtaruk.
September 23, 2021
Arizonan utility Salt River Project (SRP) and renewables company Clēnera have signed a 20-year power purchase agreement (PPA) for the CO Bar Solar project that is expected to deliver between 440-480MW of power
September 23, 2021
Russian wholesale electricity market administrator JSC ATS has allocated 775MW of solar PV in the country’s eighth auction round for largescale renewables, which had an average price of ₽5.18/kWh (US$0.071/kWh)

Subscribe to Newsletter

Upcoming Events

Solar Media Events
October 6, 2021
Solar Media Events
October 19, 2021
Solar Media Events
December 1, 2021