The Photovoltaic Boom

The economics of polysilicon production rule out the possibility of a long term shortage. Currently polysilicon costs $60 per kilogram. According to an excellent report authored by Jesse Pichel and Ming Yang, Research Analysts with Piper Jaffray, posted on the website Renewable Energy Access, it costs $200 million to build a manufacturing plant capable of outputting 3,000 metric tons of polysilicon per year. That means that at $50 per kilogram, such a factory would gross $150 million every year. Considering the raw material, unprocessed silicon, is one of the most abundant materials on earth, the margins must be pretty good. When the photovoltaic industry only consumed 10% of the world’s polysilicon manfacturing capacity, manufacturers were reluctant to build new plants since the integrated circuit industry – their primary customer – is cyclical and experiences booms and busts. But now the solar cell manufacturers are consuming over 30% of worldwide polysilicon manufacturing capacity, with no end in sight. Demand from the photovoltaic segment is significant, sustainable, and growing fast.

What is most amazing is that the worldwide photovoltaic industry is still so small.
Eco World