Impending pSi oversupply; Masdar big on thin-film; Reprieve in Germany

Polysilicon

Kyocera announced innovations in reducing thickness for multicrystalline silicon-based cells, leading to more efficient consumption of polysilicon, the raw ingredient that is currently experiencing a short-to-medium term supply bottleneck. Gunther Portfolio reports of a company called Schmid Silicon Technology that has developed an alternative process to the conventional Siemens process of polysilicon manufacturing called the UMOSI process, which supposedly has a cost structure that is 28% cheaper.

There are signs that the bottleneck will ease soon, however. Michigan-based Hemlock Semiconductor is ramping up production as its new facilities come on line and will double polysilicon production this year and will produce 46,000 tons by 2012. An affiliate of China-based PV manufacturer, Yingli Green Energy, is also exploring a move up the solar value chain to produce 3,000 tons of polysilicon annually. In fact, the Prometheus Institute warns that a worse-than-expected oversupply of polysilicon is impending.

Thin Film

I would think that an oversupply of polysilicon is good news for installers of silicon-based PV solar panels, and a less favorable proposition to thin-film PV producers, which have built their current competitive advantage on the fact that they use less polysilicon. However, the Prometheus Institute believes that advances in technology will help the thin-film industry continue to thrive as production grows from 1GW this year to 9 GW in 2012. One observer attributes this to the barriers to entry in an industry that is dominated by handful of large players like First Solar.

Another “big player” is the government of Abu Dhabi. More specifically, the government-owned Abu Dhabi Future Energy Co., as part of its Masdar Initiative and Masdar City plans, has contracted Applied Materials to build three SunFab Thin-Film lines with 210 MW of capacity. This $600 million contract is part of a $2 billion initiative to start a world class thin-film development company (see press release).

Big Solar

Some notable joint projects for utility-scale solar plants in the U.S. announced recently include eSolar and Southern California Edison’s plants totaling 245 MW in the Antelope Valley of Southern California; and Duke Energy and SunEdison’s PPA to build a 16 MW solar plant in Davidson County, North Carolina that will be the largest PV array in the country at the time of construction.

Policy

The entire solar industry heaved a collective sigh of relief when an agreement to reduce feed-in tariffs for solar power in Germany by up to 10% instead of 25-30% as urged by opposers of the subsidy was reached among German policymakers. On the China front, it is reported that the central government will soon release policies to stimulate domestic adoption of solar power. Currently, more than 90% of solar modules produces in China are exported.

Corporate and Industry Trends

German auto-parts manufacturing giant Bosch is to aquire 50.45% of PV-maker Ersol, valuing the company at just over EUR 1 billion. Greentech Media asks whether this is a fair price and notes that this could be a start of a trend of large engineering and manufacturing firms seeking to diversify their holdings as valuations for silicon-based PV producers decline as polysilicon goes into oversupply.

Meanwhile, South Korea seems to be ramping up its solar industry with reports like this and this.

And to end this post on a sunny note, solar optimist and futurist Ray Kurzweil predicts solar will be competitive with fossil fuel energy in five years.