3 Reasons the price of solar power is going to drop in the next 2 years.

If you are thinking about about installing a solar voltaic system, you should wait for at least a year or two. Read below to find out why. This is a pretty rough smattering of information, but it gives you the general idea.  Everyone keeps saying solar power prices are going to drop, but the claims are rarely backed up by evidence. So below is the evidence.

1.      Expanding Supply.

The cost of polysilicon is the main factor in current solar module pricing.  New production capacity is going to significantly reduce the price of this commodity.   Several Chinese companies are also entering the market. There remains some doubt about the ability of the Chinese companies to produce quality ingots. However, most of the Chinese companies are buying turnkey production lines from established market leaders.  Even if the polysilicon produced by these Chinese factories isn’t quite up to par, the supply will still be consumed for B market panels, which will still drive costs down.

Most solar cell producers are locked into multiyear contracts at the current price; however, new producers who are not currently tied up in supply contracts are entering the market


Supporting Links:

·         Hemlock’s $1.5B polysilicon expansions coming online for solar, semi industries

o   To nearly double its output of polycrystalline silicon as part of a $1.5 billion expansion announced last year, Hemlock, Mich.-based Hemlock Semiconductor Corp has begun production at its new polysilicon facility to begin serving the semiconductor and solar energy industries

o   Largest in the world (for now).


·          Powercom to construct polysilicon fab in Taiwan

o   Construction is set to begin soon with capacity to start coming online in the fourth quarter of 2009. First-phase capacity is set at 1,500 metric tons. Powercom detailed that eight phases of capacity are scheduled, with the total amount to reach 12,000 metric tons.


·         Renewable Energy Corp to invest US$2.5bil

o   Production will begin in 2010 and reach full capacity of 740 megawatts of wafers, 550 megawatts of solar cells and 590 megawatts of modules by 2012. The investment is the first of “several planned development phases,” the company said.


·         Suntech Power buys stake in Shunda

o   Shunda is building a polysilicon plant in Yangzhou, Jiangsu province, China, with a first-phase capacity of 1,500 metric tons. Production is expected to start before October. The plant will use Siemens (nyse: SInews people ) technology, with a closed-loop recycling system.


·         Hoku Materials Building 3,500 metric ton polysilicon production facility with proceeds from equity distribution.

o   The net proceeds from the offering will be used for engineering, procurement and construction of the Company’s 3,500 metric ton polysilicon production facility in Pocatello, Idaho.

o   Construction pictures / timeline


·         China’s SMIC plans to make polysilicon

o   Semiconductor Manufacturing International Corp, China’s biggest contract chip maker, plans to become a maker of polysilicon, a key material for solar energy cells, a source familiar with the situation said on Thursday.


·         Chinese fabric company starts a polysilicon producing subsidiary

o   Jiangyin, China-based JiangSu Sunshine Co., also known as China’s largest wortsted and wool fabric company—which produces 350,000 premium men’s suits a year—has apparently advanced $121.4 million with the intention of buying polysilicon making equipment for its subsidiary Ningxia Sunshine Silicon Co., which plans to output a relatively paltry 4,000 tons of polysilicon per year compared to larger plants.


·         Prime Solar starts design of 5,000MT polysilicon plant in Leipzig, Germany

o   Polysilicon and multicrystalline wafer manufacturing start-up, Prime Solar, headquartered in Perth, Australia has selected CDI Corp to undertake detailed engineering design work for the construction of a polysilicon manufacturing facility near Leipzig, Germany. The contract was signed with CDI Engineering Solutions, a division of CDI Corp.


·         Samsung, Siltronic open $1B wafer factory in Singapore – 6/19

o   Samsung Electronics and Siltronic opened a new US$1 billion factory in Singapore Thursday to produce 300-millimeter silicon wafers for the chip industry.

2.      Large investments by established tech companies.

Well established industry leading tech companies are venturing into the solar power industry. Among others, Giants INTEL and IBM have both stepped into the arena.  The competition between these two giants will push the technology further while dropping prices.

Supporting Links:

·         Unitech to volume produce solar cells in mid-June

o   Unitech Printed Circuit Board will move its solar cell plant into volume production in mid-June, with expansion already planned for 2009


·         IBM and Tokyo Ohka Kogyo Collaborate to Make Solar Energy Affordable and Easy

o   June 18, 2008… IBM of Yorktown Heights, New York USA, and Tokyo Ohka Kogyo Co., Ltd. (TOK) are working together to develop and bring to market low-cost next generation solar energy products. The companies want to produce solar energy products that are more affordable and easier to install than those that are available.


·         Intel spins off solar-panel manufacturer

o   Newly developed technology for use in solar panels is being spun off by Intel for production and sales by a new company to be called SpectraWatt Inc. The new firm will make photovoltaic cells, the primary component in panels that use sunlight to generate electricity


·         Chip Makers Invest In Solar Power

o   Two giants of silicon-based computer chips are setting their sights on solar power with major initiatives. IBM is teaming up with Japanese photolithography materials producer Tokyo Ohka Kogyo (TOK) to develop copper-indium-gallium-selenide (CIGS) solar cell technology. And Intel is spinning off SpectraWatt, which will make conventional crystalline silicon-based cell

3.      New Technologies

Several new technologies are now coming to market. These technologies include increasing the production efficiency and use of traditional solar cells and polysilicon feedstock, as well as solar modules that do not use polysilicon at all.  Both concentrated solar power and solar thermal energy production are receiving new attention.

Supporting Links:

·         Heliovolt – 100 times thinner than conventional solar systems

·         Concentrated Solar Power – DOE Site

·         Solaicx – New manufacturing process for lower cost / higher quality ingots

o   Solaicx has created an advanced manufacturing technology that yields low-cost, higher quality solar ingots and wafers optimized for photovoltaic applications. The company’s proprietary equipment is designed for the high volume, continuous production of superior-performance, single crystal silicon ingots that dramatically reduce manufacturing costs. Designed specifically for the photovoltaic industry, the Solaicx method sidesteps the inherent inefficiencies of the semiconductor manufacturing process, enabling efficiencies that translate into more affordable solar electricity

·         NanoSolar

o   1 Gigawatt solar cell machine: Video of thin film “printer” – close to breaking the $1/ watt barrier (6/18)

·         Using cadmium telluride instead of silicon.

o   The cost reduction comes from the new, continuous manufacturing process which uses cadmium telluride thin film rather than the more expensive crystalline silicon. Once manufactured, the cost to buyers could be brought down to $2 per watt, which is roughly half the current cost of solar panels.

·         Copper-Indium-Gallim-Selenide solar cells (CIGS)


Article on Eco-Geek – “Cost of Solar Panels Expected to Plummet”





One Response to “3 Reasons the price of solar power is going to drop in the next 2 years.”

  1. howtogogreen Says:

    I think that’s great! Small electrical systems are what is needed by the largest number of poverty stricken world wide. And the prices have to come down. Most people don’t own an electric stove, but if they had one panel, one battery and a lightbulb, they’re kids could read after dark. And education is the key! Come check out my blog at word press, or Google search Howtogogreen. You can reach me at my sites evergreenenergy.com and splitzvillefarm.com.

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