Frost: Polysilicon Shortages Will End in 2008
February 26, 2008 // Published as a news service by IHS
Even though the solar energy industry continues to grow at a fast pace, the solar photovoltaic (PV) market has faced several market challenges recently, including severe shortages and allocations of polysilicon - a key component of the majority of solar panels.
According to Frost & Sullivan, however, polysilicon supply should catch up with the demand in 2008.
Recent analysis from Frost & Sullivan of the global solar PV market found earned revenues of $6.49 billion in 2005, with estimates to reach more than $16 billion in 2012.
It was estimated that the demand for silicon feedstock neared 26,000 metric tons (M/T) in 2004. In 2005, there was a rise in wafer production by nearly 7%.
But analysts said this increase was not sufficient to keep up with the market need. In 2006, the shortage of feedstock reached a critical point affecting the production of solar panels and, consequently, industry growth.
Analysts said things are about to change.
"We expect polysilicon supply to catch up with the demand already in 2008," said Alina Bakhareva, renewable energy program manager at Frost & Sullivan. "The majority of the new quantities will be supplied to the market by [the] top four producers that are expanding their existing production capacities."
These four top polysilicon producers are expected to add more than 17,000 M/T of capacity in 2008. This would represent more than a 50% increase over their current capacities, analysts said.
"Since these companies are well established in the industry and have accumulated many years of experience, they have quite short ramp-up time for the new plants and we can expect them to start the production on time and stick to their announced schedules," said Bakhareva.
Demand from the semiconductor industry is expected to grow at steady one-digit rates, analysts said. Demand for solar-grade polysilicon is expected to reach more than half the total demand for high purity silicon in 2008-2009.
Source: Frost & Sullivan.