Materials costs threaten continued market growth for solar PV as a global shortage of high purity silicon pushes prices to record highs
Concerns have been raised that a global shortage of polysilicon, the main component of solar cells, could stall rapid growth in the solar energy sector. Spiralling prices of raw materials could see suppliers unable to afford to meet demand, ultimately leading to a stagnation of the solar-cell market.
Solar-grade silicon prices have leapt from around $9/kg in 2000 to $25/kg in 2004 and now $60/kg. Such increases threaten the annual growth rates of 30 – 40% the industry has enjoyed since 1997 and result from renewed vigour in the semiconductor industry that has seen significant recovery since the bubble burst of 2000, when excess silicon flooded the market.
In a bid to combat the looming crisis, producers are developing technologies that allow cheaper, solar-grade silicon which need not be as pure as that used for semiconductors, while others propose making silicon wafers bigger, or thinner or moving to thin-film production techniques.
Nonetheless, in the short term these efforts are unlikely to yield significant results. The solar market is currently worth an estimated $7 billion annually and subsidies from some governments has seen demand soar.