January 21, 2012
Polysilicon Price Drop Looks Sustainable

Polysilicon crystal is an input into making silicon-based photovoltaics. After peaking at over $400 per kilogram in 2008 due to rapidly rising demand big capital investments in polysilicon crystal manufacturing plants led to a glut. Now polysilicon crystal has fallen in price by an order of magnitude. The good news: according to that link the manufacturing cost (at least for lower cost producers) is still lower than the market price. So the current lower market price is sustainable and will lead to lower silicon PV prices as new contracts for polysilicon are negotiated.

However, oversupply in the polysilicon market pushed the spot price of silicon down from $80 per kilogram in late March 2011 to under $30 per kilogram in December, representing more than a 60 percent drop.

For the future of silicon PV what we need to know: how much further can polysilicon manufacturing costs drop? Is energy cost the biggest cost in that process? Are we need the floor for long term polysilicon prices? Can silicon PV continue to drop in cost as fast as thin films?

As I've written previously, the manufacturing and installation cost trends are what we should watch when it comes to the future of renewables. Market prices can be going up and down independent of manufacturing costs.

Update: In the comments Ronald Brakels points to a report on research to lower the energy cost of making polysilicon crystals. This has the potential to raise the energy return on energy invested (EROEI) of silicon PV.

Share |      Randall Parker, 2012 January 21 03:08 PM  Energy Solar


Comments
Fat Man said at January 21, 2012 5:55 PM:

And as I have written previously, the cells could be free and solar would still be an economic disaster.

01/18/2012 04:41 PM
"Solar Subsidy Sinkhole: Re-Evaluating Germany's Blind Faith in the Sun"
http://www.spiegel.de/international/germany/0,1518,809439,00.html
By Alexander Neubacher

"The Baedeker travel guide is now available in an environmentally-friendly version. The 200-page book, entitled "Germany - Discover Renewable Energy," lists the sights of the solar age: the solar café in Kirchzarten, the solar golf course in Bad Saulgau, the light tower in Solingen and the "Alster Sun" in Hamburg, possibly the largest solar boat in the world. The only thing that's missing at the moment is sunshine. For weeks now, the 1.1 million solar power systems in Germany have generated almost no electricity. The days are short, the weather is bad and the sky is overcast.

"As is so often the case in winter, all solar panels more or less stopped generating electricity at the same time. To avert power shortages, Germany currently has to import large amounts of electricity generated at nuclear power plants in France and the Czech Republic. To offset the temporary loss of solar power, grid operator Tennet resorted to an emergency backup plan, powering up an old oil-fired plant in the Austrian city of Graz.

"Solar energy has gone from being the great white hope, to an impediment, to a reliable energy supply. Solar farm operators and homeowners with solar panels on their roofs collected more than €8 billion ($10.2 billion) in subsidies in 2011, but the electricity they generated made up only about 3 percent of the total power supply, and that at unpredictable times. The distribution networks are not designed to allow tens of thousands of solar panel owners to switch at will between drawing electricity from the grid and feeding power into it. Because there are almost no storage options, the excess energy has to be destroyed at substantial cost. German consumers already complain about having to pay the second-highest electricity prices in Europe."

Engineer-Poet said at January 22, 2012 4:50 PM:

If the cells were free, you could put them on all kinds of things:  windows, awnings, siding and roofing products.  The price of inverters is multiples of the per-watt price of switching power supplies, so you'd expect them to converge as production volume increases.  At the outset, you can just dump power if you have too much.  There are many choices for dump loads, DHW being a pretty good one.

Simple-cycle gas turbines can be started from cold in 15 minutes, combined-cycle turbines can be started from warm in about 2 hours.  There's no way that a weather system can take out the sunlight across a country even as small as Germany in 15 minutes, and weather forecasts would predict that hours if not days in advance.

The real problem with solar PV is storage.  A large fraction of electric vehicles would provide demand-side management on the scale of minutes to an hour or so during the day (several hours for overnight charges), but that's something we don't have yet.  Perhaps the manganese-carbon-salt battery will be cheap enough to build grid storage on the order of a day of demand, which makes all kinds of heretofore-impossible things into tempting options.

Ronald Brakels said at January 22, 2012 6:23 PM:

Here is a popular article about a process for reducing the energy cost of producing silicon and improving quality. I don't know how practical this process will turn out to be:

http://www.technologyreview.com/energy/39314/?p1=A2


anonyq said at January 23, 2012 9:08 AM:

Winter in Germany isn't known for long sunny days so i really doubt it is the unexpected shortfall of solar electricity that leads to the need to start up the oil plant. What is a more likely explanation is that the winter until now has been warm what means low heating demand. Germany has a lot of combined heat/electricity plants and if there is no demand for heat than they also don't supply electricity

Brett Bellmore said at January 23, 2012 7:12 PM:

If the cells were *free*, you could, in northern climes, simply dump the power into a resistor bank coupled to a pile of bricks, to provide heat through the night. Such systems are already available in areas where the off peak power is cheap enough.

Randall Parker said at January 23, 2012 11:11 PM:

Fat Man,

Yes, Germany's investment in solar is really pretty stupid. It is a winter peaking country for electric power demand. It is rather far north. It has lots of clouds. What a stupid location for solar power enthusiasm. I've discussed this at length with a sharp German business exec in charge of a hundred million euro business unit of a German corp. He despairs for Germany's power costs because of the uncompetitive effects of higher electric power rates. He cited examples of discussions he had with apartment building dwellers thrilling their tenant association installed solar on the roof while remaining oblivious to the cost per kwh. The faith is strong. Without religious belief people just shift their faith to other subjects. No reasoning with them.

Ronald Brak said at January 23, 2012 11:54 PM:

I think German PV subsidies have been brilliant. Germany pretty much single handedly created the PV industry. Without them PV wouldn't be reaching the point where it is reaching grid parity in places like Australia and Hawaii and literally millions of people in developing countries wouldn't currently be benefiting from solar power. Think of it as foreign aid via other means. Germans paid and as a result Australians and other can now make money by installing solar PV and CO2 emissions are reduced. Yes, this cost Germans a lot of money, but it is appreciated. In my opinion this more than makes up for their 1976 entry in the Eurovision Song Contest.

anonyq said at January 24, 2012 4:38 PM:

In Germany demand peaks in winter but the same is true for low(ish) production cost capacity with all their combined heat/electricity plants. If you look at the demand curve and remove what is supplied by those combined plants that obviously don't operate much during sumer than it wouldn't surprise me if the resulting curve peaks in the summer.

Electricity costs are in most industries not important and in the few in which they are can often plan their electricity usage to times when it is cheap. Which can be very cheap with wind.

Ronald Brak said at January 24, 2012 5:30 PM:

Decreasing silicon costs have been very helpful in reducing the price of solar PV, but another big factor has been the reduction in the amount of silicon required per watt. Currently solar cells are being cut from silicon blocks that are only 180 microns thick and this may go down to 80 microns over the next few years, with, I presume, little loss in efficiency.

Nick G said at January 26, 2012 4:16 PM:

I've discussed this at length with a sharp German business exec in charge of a hundred million euro business unit of a German corp.

Is the corp a utility, and is he an engineer? I've talked to plenty of extremely successful people who were completely incompetent outside their very narrow area.

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