Solar Power Sector Will Need to Cut Costs

The risk of a glut in solar panels sales, as input costs fall, makes cost-cutting now key, Iain Dorrity, Chief Executive of PV Crystalox, said on Tuesday.

At present a shortage of high grade silicon, a key component in solar panels, has created a bottleneck, boosting producer profits as demand for the clean energy source outstrips supply.
But a ramping up in silicon investment means the production of solar panels could surge in the next two to three years, risking a shakeout across the supply chain to mirror a glut now in the biofuels sector, another renewable energy source.

PV Crystalox is half-way through that supply chain, making wafers from high grade silicon, to sell to manufacturers of solar cells and panels. It wants to move up that chain to try and contain costs.

“Our position as one of the lowest cost producers will put us in a strong position,” Dorrity said. “Our strategy is to move upstream, not to compete with customers.”

The group’s London-listing last month raised 50 million pounds (US$101.9 million) to build a high grade silicon production facility in Germany.

Dorrity didn’t rule out a glut, and said he wanted more countries to copy Germany’s generous support for the energy source, which isn’t yet competitive with more conventional sources of electricity like coal.

Planet Ark