Material shortage seen to cast cloud over solar energy industry

This article was published by the Taiwan Headlines on March 22, 2006. It reports that the world market for solar-energy equipment is expected to see its growth pace to slow down to 10 percent, from an average of 30 percent during the past several years. Such slow down appears to be the result of a supply shortage in substrate material polysilicon.

According to industry analysts, the average price of the material has shot to US$75 per kilogram in recent months, from US$9 per kilogram in 2000. Once, the average price of the material even reached US$200 per kilogram in spot-price market. The supply shortage in this material has slowed down market expansion. For example, installation of solar-energy panels increased only 17 percent worldwide in 2005, down from 55 percent in 2004.

So far, solar-energy products are accounting for 40 percent of the world's consumption of polysilicon. The figure is expected to rise further to 50 percent in 2010. For a long time, integrated-circuit (IC) chips have been the major application of the substrate material.

Meanwhile, rising oil and gas prices worldwide have driven up demands for various energy-efficient tools, including solar-energy equipment. According to industry analysts, a total number of 1,460 megawatts of solar-energy equipment was installed worldwide in 2005 alone, putting the cumulative number at over 5,000 megawatts as of the end of that year. The solar-energy equipment industry is expected to gain revenue of US$18.6 million to US$23.1 billion in 2010, with an annual installation volume of 3,200 to 3,900 megawatts.

Currently, Europe, the United States and Japan are the world's top three markets for solar-energy products. The three of them account for 90 percent of the world's consumption in this area. In the mean time, Germany is the world's largest single market for solar-energy equipment, followed by Japan. Germany has a total installation volume of 837 megawatts, which is nearly 8 times the size of that of the United States.

Nonetheless, Taiwanese suppliers of solar cells do not expect the material polysilicon to take a serious toll on them, despite the fact that demand for the material is about 30 percent more than the supply. In order to cope with the supply shortage of the material, many Taiwanese suppliers are seeking stable supply sources, increasing their use of reclaimed materials, and further reducing the thickness of their polysilicon wafers.