Polysilicon

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By Christopher Eyres


The global supply of polysilicon is hurtling toward half a million tons by 2014, almost doubling today's supply inside 2 years, from 266,000 tons this year, analysts at Macquarie Group L.T.D have told Bloomberg Stories. The ricochet in solar prices as demand and supply have in turn pushed and pulled at the solar PV market have made a bedazzling seesaw over the last couple of years. Currently polysilicon prices are in a sheer drop, and taking out solar firms, not solely in the US like Evergreen and Solyndra were but around the globe.

Even Chinese makers are hurting . About ninety percent of China's polysilicon plants may postpone production due to the price slump, Xie Chen, an analyst at the China Nonferrous Metals Business Association, which acts as a conduit between industry and govt., told Bloomberg. The price drop hits smaller producers toughest, but with the enticement of the possible profit margins over 40 percent, these dizzying lurches between demand and supply are not going to ease up soon either.

The initial squeeze and ensuing lurch into glut started in 2004, when Western european countries like Spain first commenced introducing assistance for clean energy to meet the Kyoto Concord climate laws on the point of going into effect in 2005, requiring clean power from sources like solar and wind. Spain offered an at first excessively generous Feed in Tariff that fed the development of a record supply of solar energy for the country, in the process catapulting the Spanish energy firms like Abengoa to solar world leader status.

From $30 in 2003 before the replaceable policies, prices increased to $475 in 2008, as demand overshot supply. Then as restrained demand finally pushed new supplies on-stream, prices flattened again. By 2009, solar firms were looking at a surfeit again, and now prices are back down below the $30 a kilogram mark that preceded the 1st run on polysilicon to supply the EU solar sector awakened by the Kyoto Accord.

Before the major introduction of solar power in 2004 in Europe, polysilicon was only utilized for computer chips, in far smaller amounts. Although the Carter administration developed the 1st solar in America it languished as quickly as the following administration dumped the assistance, braking the world's first utility-scale solar company in the 1980s. The passing of Luz reduced the inducement for any new private solar investment, though the solar farm it built was purchased and has been supplying the California grid for 30 years.

Then, due to the 2009 Recovery Act under the Obama administration, with its $30 bill in replenish-able inducements ( like the $ [*FR1] bn. administration guarantee of some of the private loans that Solyndra got from silicon valley VCs ) now it is US demand which has shot up to ECU levels. The ensuing surge in US solar development squeezed supply pressures again, and now a second glut promises to keep polysilicon costs at this level at least until 2014.

With so much supply coming on-stream, polysilicon prices will fall into the $25 range within 3 weeks and will probably remain near that level for at least 2 years, researchers at Ticonderoga told Bloomberg.




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