Solar Energy Companies to Meet in Milan

Solar cells supply only a small portion of the world’s energy demands, but scientists and analysts will gather next week in Milan, Italy to talk about the technologies that could encourage more people to turn to the Sun for their power needs.

More than 90 percent of solar cells are made with crystalline polysilicon, and producers do not have the facilities or the supplies to cope with growing demand, which means the price will remain high. Analysts give polysilicon supplies a great deal of consideration when forecasting a company’s future, as a company that secures its supplies will know how much it has to pay for them.
Larger and more established companies, like SunPower Corp., are buying as much of the material as they can under multiyear contracts, forcing smaller competitors to make small “spot” orders at prices that can be two or three times higher, if not more.

Right now, Stone said, supplies are so tight that solar companies are essentially paying polysilicon producers to build factories to make the material. He doesn’t see much evidence that prices will come down this year or early next year.

Reducing costs is a key issue for many solar cell makers as they increase production. When the cost of making solar power components comes down, the power itself will become less expensive and more consumers will use it.

“The overall goal is to get solar power down to the level where it can compete with grid-supplied electricity without the need for subsidies,” Stone said.

The biggest gainer in the sector, however, has solved the cost problem by avoiding polysilicon altogether. First Solar Inc. uses “thin film” technology instead of polysilicon. While it is less efficient at converting solar energy into electricity, thin film modules – which are groups of solar cells – can produce power more cheaply than polysilicon modules can.

Until costs come down, though, most European countries are subsidizing solar power, requiring utilities to buy solar energy at above-market prices. Companies and analysts watch these laws and tariffs closely, and the two largest markets on the continent, Germany and Spain, are both reviewing their solar power rules.

Forbes