Amid the daily drumbeat of mass layoffs, here’s some sunny news: Solar startup Suniva cut the ribbon Thursday on a photovoltaic cell factory outside Atlanta.
As solar factories go, Suniva’s plant – the first such facility in the Southeast – is relatively small, making 32 megawatts of solar cells annually until production is fully ramped up to 175 megawatts in 2010. But the factory will create 100 green collar jobs and it follows the opening of SolarWorld’s new solar cell fab outside Portland, Ore., that will produce 500 megawatts’ worth of solar cells, and thin-film solar startup HelioVolt’s factory in Austin. Meanwhile, Solyndra, a Silicon Valley thin-film solar startup, is expanding its production facilities while Bay Area rival OptiSolar is building a Sacramento factory that will employ 1,000 workers to produce solar cells for the power plant the company is building for utility PG&E (PCG). (Leading thin-film solar company First Solar (FSLR) operates a factory in Ohio as well as plants in Malaysia.) But Chinese solar giant Suntech (STP) last week said it has put plans for U.S. factories on hold due to the credit crunch.
The Suniva grand opening comes on a good news-bad news day for the solar industry. On one hand, President-elect Barack Obama is expected to nominate alternative energy proponent and Nobel laureate Steven Chu, director of the Lawrence Berkeley National Laboratory, as Secretary of Energy. But the solar industry faces a tough year ahead. On Thursday, research firm New Energy Finance, echoing other analysts, predicted prices for polysilicon – the base material of conventional solar cells – would fall 30% in 2009. That’s bad news for conventional solar cell makers like SunPower (SPWRA) and Suntech if they’ve locked in silicon supplies at higher prices but provides an opening for further growth for thin-film solar companies that make solar cells that use little or no polysilicon.
“We expect to see significant drops in the price of modules next year,” wrote New Energy Finance CEO Michael Liebreich. “Any manufacturer who does not have access to cheap silicon and who has not focused on manufacturing costs is going to be in trouble. The big shake-out is about to begin. The next two years will change the economics of PV electricity out of recognition.”
This article has got it wrong.
Falling silicon price is GOOD for silicon module providers (Sunpower, Suntech)!
Silicon typically accounts for 60% of the cost — so this should make the silicon based solar modules MORE competitive with thin film.
I think the author of the article meant that because SunPower and SunTech already have very large supply contracts of silicone through 2012 (set at higher prices) that they have over-committed themselves and will be at a disadvantage to the companies who will be buying the raw supply at a reduced price. But if I know anything about SPWRA, STP, ESLR, ENER, and others they will gobble up the silicone at the lower prices as well and therefore avarega down their overall price of silicone wafers. This is great news on all fronts. Bottom line cheaper solar power.
I don’t see how such person who doesn’t understand solar and lacks a sound analytical skill get to publish article. Doesn’t anyone with basic technical background do any check first before publication? Todd has one agenda…pump the FSLR in his profolio
In defference to the prior poster, this article does NOT have it wrong regarding silicon prices. If a PV manufacturer has locked-in silicon prices, and subsequent to these futures, the underlying price drops, your contract is costing you money. Now, just because other players can move in to capture a lower price on a basic commodity, does not in itself guarantee a successfull business venture. Established players such as SPWR, STP, and the like, have business models that are already executing successfully, and have instituted cost-cutting structures that span beyond time-specific commodity prices.
While it may be that some silicon solar cell manufacturer’s who have long term contracts will be hurt, I can’t see any way this will help solar cell makers that don’t use polysilicon. All they will see is cheaper competitors!
I think the significant quote here would be:
“The next two years will change the economics of PV electricity out of recognition.”
If that statement is true, and it means, as I surmise, that the mean cost per kilowatt is going to fall significantly, then fossil fuels’ pricing advantages are about to be greatly reduced. It this comes true, it will put an end to the market-gaming strategies fossil fuel suppliers have heretofore used to suppress the growth of the PV industry.
Does this imply that we’ve begun an economically-positive transition from fossil to solar?