Jan. 17, 2008 – A “huge” oversupply of solar panels planned for production in 2008 will sink capacity utilization rates to 0.46 (vs. 1.0 as a balance of capacity/output), and levels won’t get much above 0.5 until sometime after 2010, until polysilicon suppliers can realize planned expansion efforts, according to a report from the Information Network.
“In the past few years we have witnessed a stampede of startups entering the solar cell market using thin film technology because of a shortage of polysilicon material,” writes Robert Castellano, president of the market research firm. “At the same time, existing suppliers have announced large expansions as a means to reduce production costs and gain a competitive edge.”
In his recent report, “Opportunities in the solar cell market for thin film technology”, Castellano projects solar panel production will increase 47% in 2008 to 5.6GW, based on analysis of 100 solar panel producers worldwide, while capacity will surge to 12.2GW. Capacity utilization will increase, but only barely, to 0.51 in 2009 and 0.55 in 2010, he says, and that should impact equipment and materials sales in the thin-film sector.
“As the shortage of polysilicon dissipates, due to ramped production and a semiconductor slowdown, prices of crystalline silicon solar panels will drop and become economically competitive with thin film technology, further exasperating thin film equipment sales,” he notes.
The report also points to record silicon solar wafer prices, driving demand for thin-film panels and a boon to those equipment suppliers. Polysilicon spot prices have surged past $400/kg (up 33% in a year), pushing solar silicon wafers past a perceived ceiling of $9.25/150mm wafer — Taiwan’s Digitimes reports that some companies are even thinking about unearthing scrap wafers buried years ago in hopes they can be reprocessed for production. And it’s becoming more difficult for wafer suppliers to pass those cost increases onto system integrators and consumers in a sector already highly subsidized by governments, Castellano notes.
Still, despite polysilicon wafers’ outrageous prices, thin-film alternatives still have much work to do in terms of efficiency and costs — just 6%-7% efficiency (maybe 10% for CdTe), vs. 15%-22% for crystalline/polycrystalline silicon solar panels. And silicon doesn’t have the toxicity or raw material scarcity issues of CdTe.
“As the shortage of polysilicon dissipates, due to ramped production and a semiconductor slowdown, prices of crystalline silicon solar panels will drop and become economically competitive with thin film technology in applications such as solar farms,” Castellano writes. He adds that power companies would prefer to wire 200W crystalline panels instead of a few 60W amorphous silicon panels for the same power output, because at the panel level the crystalline panels cost ~$0.60 more on a per-watt basis. At the system level, though, “crystalline has the cost advantage.”