in News Departments > New & Noteworthy
print the content item

comments: 0

Even though leading polysilicon producers have been operating at a loss, polysilicon capacity is expected to grow 22% in 2012 and a further 18% in 2013, according to a new report from NPD Solarbuzz.

Average industry-wide polysilicon prices for photovoltaic applications are forecast to drop 52% in 2012, while plant utilization is expected to decline from 77% in 2011 to 63%.

"The last thing the polysilicon industry needs right now is more capacity," says Charles Annis, vice president at NPD Solarbuzz. "But some of the new plants that were started two to three years ago are proving hard to abandon.

"In addition, some producers are adding capacity in an attempt to lower their costs through economies of scale," Annis continues. "Some are improving capacity productivity, while others are upgrading manufacturing technology, such as adopting hydrochlorination, to reduce power consumption and increase scale."

According to the report, total polysilicon capacity this year will exceed 385,000 tons - of which 70% is held by a small number of tier-one producers. In fact, these tier-one providers alone are forecast to satisfy all polysilicon demand under the NPD Solarbuzz most-likely end-market scenario for the next few years.

Unless end-market demand provides a strong upside surprise to expected polysilicon requirements, many of the 57 tier-two and tier-three producers are likely to exit the industry within the next 18 months, NPD Solarbuzz predicts. Indeed, even a few of the less-experienced tier-one makers may not survive over the next couple of years.

Average polysilicon prices are forecast to start to stabilize in 2013 at around $21/kg, as the remaining players rationalize utilization rates in line with end-market requirements while ensuring that selling prices remain above their cash costs.

"If China's Ministry of Commerce decides to impose anti-dumping and countervailing duties on polysilicon imports, prices are likely to increase," notes Annis. "However, this will only help a limited number of local Chinese polysilicon producers. It will hurt not only foreign producers, but also many Chinese wafer, cell and module makers.

"Also, it will not help to resolve the polysilicon oversupply issue and could restrict end-market growth due to higher prices," Annis adds.

In addition to import duties, any increase in polysilicon prices will likely be limited by first tier supply sufficiency and end-market demand for the next couple of years, according to the report. However, tier-one polysilicon producers continue to plan for longer term PV involvement, where low-cost structures, economies of scale and continuously improving productivity are expected to yield benefits as shipment volumes grow.

Meanwhile, Germany-based Bernreuter Research also recently weighed in on the status of the polysilicon market. The company predicts that after a massive market shakeout that will see the disappearance of nearly 40 manufacturers, the industry will slowly recover from oversupply by 2014.

By 2015, the solar sector could "already see the harbingers" of a polysilicon shortage once again, the report adds.

Bernreuter Research notes that its demand forecasts for solar polysilicon are more aggressive than those of many other analysts. "Several indicators we investigated point to new PV system installations of up to 37.5 gigawatts in 2012," says Johannes Bernreuter, head of Bernreuter Research and author of the report.

Bernreuter examined 72 analyst forecasts for global PV installations from 2008 through 2011 and found that the forecast average remained more than 30% below the actual results.

The company also assessed the progress of 10 polysilicon production methods, including the standard Siemens process. Although most of the new approaches will not make it into commercial production, monosilane-based technologies show promise as serious rivals to the established Siemens process, Bernreuter Research says. Another alternative - upgraded metallurgical-grade silicon - still needs to prove its value proposition.

"The sweet spot of sufficient silicon quality at low cost is very small," Bernreuter notes.

Hybrid Energy Innovations 2015

Latest Top Stories

Hawaii Hopes Storage Will Enable A 'Multi-Directional' Grid For Solar

Hawaii's public utilities have submitted controversial plans for enabling increased penetration of solar while supporting grid reliability. Planners hope a large-scale energy storage program will help reconcile day-peaking output with night-peaking demand.

NCSEA Working To Create A Solar Powerhouse In North Carolina

The North Carolina Sustainable Energy Association (NCSEA) says the importance of solar power in a diversified generation portfolio helps build broad support for clean energy policy.

Minnesota PUC Green-Lights Xcel's Community Solar Gardens Program

While the countdown for the program has started, the value of solar (VOS) tariff once envisioned for it has downshifted onto a parallel track. However, a revised VOS is expected to come into play next year.

Solar Capacity Increases Sharply At U.S. Schools

A new study shows that solar power for K-12 schools is a hot market with plenty of room for future growth.

SolarCity Strikes An East-West Pose In Its New Commercial Mounting System

The first major new product release from SolarCity's Zep Solar business unit since last year's merger reveals new opportunities in the commercial solar space.

Future Energy_id1428