According to Solarbuzz’s “Polysilicon and Wafer Supply Chain Quarterly Report,” polysilicon prices are expected to fall 48% while wafer prices drop 56% year-over-year in 2012; results which have so far led to only 12 Chinese PV polysilicon manufactures still producing, and of those, more than half running at reduced utilization rates.
The report notes that industry-wide, wafering plant utilization is anticipated to average only 53% this year, but as the prices come close to current cash costs of tier 1 makers, price declines are expected to slow to less than 7% per year. Solarbuzz predicts that average 2013 polysilicon prices will be US$23/KG and wafer prices of US$0.24/W with top tier makers still able to make positive margins.
“Although the 30% plus net profit margins of the not-so-distant past are unlikely to be seen again by any PV polysilicon makers in the next few years, leading producers are targeting total costs of less than US$20 per kilogram in 2013, which may enable modest profitability,” stated Charles Annis, vice president at NPD Solarbuzz.
As polysilicon cost goes down, so will the cost of PV wafers. Solarbuzz notes that wafer makers are perpetuating the drop of processing costs with holistic approaches to reducing slurry consumption, increasing recycling, minimizing kerf loss, decreasing electricity consumption, increasing conversion efficiency and more productivity enhancements.
“Many of the less cost-competitive PV industry participants will not survive the new low-priced environment, but even at prices US$0.25/W, top-tier wafer makers, particularly those with low-cost internal polysilicon supply, are targeting 12% or better margins,” concluded Annis.