A Price Drop for Solar Panels

Solar electricity is about to get much cheaper, industry analysts predict, because a shortage of the silicon used in solar panels is almost over. That could lead to a sharp drop in prices over the next couple of years, making solar electricity comparable to power from the grid.
High demand generated by government subsidies worldwide and a shortage of processed silicon have kept prices for solar-generated power much higher than average electricity prices over the past few years. Solar power is more than three times the cost of electricity from conventional sources, according to figures from the industry tracking firm Solarbuzz and the United States’ Energy Information Administration. Solar power cost about $4 a watt in the early 2000s, but silicon shortages, which began in 2005, have pushed up prices to more than $4.80 per watt, according to Solarbuzz.

Crystalline silicon has long been the staple of the semiconductor industry. But it’s also the active material in the most common type of solar panel, and the increased use of solar power has led to the shortage of the material. Indeed, the growth in silicon production hasn’t kept pace with the rise in solar power. “It takes about two or three years to add capacity,” says Travis Bradford, an industry analyst for the Prometheus Institute. The shortage has been severe enough to drive up silicon prices to more than 10 times normal levels, to $450 a kilogram, adds Ted Sullivan, an analyst at Lux Research.

Technology Review