Solar Energy and Polysilicon: End of Shortages in 2008

The solar energy industry continues to grow at a very fast pace. However, over the last few years it has been facing one of its biggest challenges. In fact, severe shortages and allocations of polysilicon have played a strategic role, affecting the market. This year, a turnaround is expected.

LONDON - 19 February, 2008 - As climate change rises on the international agenda, the solar energy industry continues to grow at a very fast pace. However, over the last few years the solar photovoltaic market has been facing one of its biggest challenges. Severe shortages and allocations of polysilicon - a key component of the majority of solar panels - have played a strategic role, affecting the market. This year, a turnaround is expected. Polysilicon supply should catch up with the demand offering sunnier prospects for the solar energy industry.

In fact, according to Frost & Sullivan's forecast ( the Global Solar Photovoltaic Market earned revenues of $6.49 billion in 2005 and estimates this to reach more than $16 billion in 2012. This incredibly high rate growth generated a huge demand of polysilicon.
It was estimated that the demand for silicon feedstock neared 26,000 tonnes in 2004. In 2005 there was a rise in wafer production by nearly 7 per cent. However, 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, the industry growth.

Things are now about to change. "We expect polysilicon supply to catch up with the demand already in 2008" - says Alina Bakhareva, Renewable Energy Programme Manager at Frost & Sullivan. "The majority of the new quantities will be supplied to the market by top 4 producers that are expanding their existing production capacities."

In fact, four top polysilicon producers are expected to add more than 17000 tonnes of capacity in 2008. This would represent over 50% increase over their current capacities. "Since these companies are well-established in the industry and have accumulated many years of experience," continues Alina Bakhareva "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."

On the demand side, demand from the semiconductor industry is expected to grow at steady one-digit rates. Demand for solar-grade polysilicon is expected to reach over 50% of the total demand for high purity silicon in 2008-2009.

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