Feb. 8, 2008 – Norway’s Renewable Energy Corp. says a proposed granular solar-grade polysilicon manufacturing facility in Moses Lake, WA, is overrunning costs by 20% (overall capital investment now estimated at ~$800M), and commercial production ramp has been delayed until 4Q08, which could affect overall production targets later in the year.

The project was announced in late 2005 and started groundbreaking in the fall of 2006, initially planned for 6500 MT capacity of granular polysilicon and 9000 MT of silane gas. Fluor Corp. was brought on to help as a contractor. But “tight market conditions have pushed the world’s equipment vendor and fabrication shop capacity to the limit,” the company said in a statement, adding that delays to equipment deliveries are mainly to blame.

Included in the delays are modifications to a Siemens reactor, part of a “debottlenecking” project begun in Sept. 2006 and scheduled to have been completed this quarter (1Q08), to maximize production from existing Siemens based facilities. That schedule will now run parallel to other reactor modifications announced last April and expected to be onstream in late 4Q09.

Due to the delays, REC now expects production of ~7000 MT of polysilicon in 2008, down about 12.5% (~1100 MT) from initial projections — but the company says the impact on downstream capacity should be “significantly lower” than the production loss might indicate.

The delay isn’t a surprise to everyone. “In terms of pricing, every industry right now is facing rising costs for fuel, for concrete, for steel and [for] any of the basic infrastructure that would go into a facility,” according to Ron Pernick, principal at research firm Clean Edge, quoted by Greentechmedia, adding that “all industries are facing” price increases for basic utility commodities, anywhere from 30%-300%.