NYT article on PV shortage

[Roland Mösl]

Seems now the most oil dependent economy is the US

Look at it this way. If all (well most) transport runs on oil and the
price keeps going up are people going to stop driving tomorrow. OR will
they keep paying the price at the pump.

The most stupid will pay the price at the pump.

The intelligent ones will buy rechargeable hybrid cars,
like the just introduced Toyota Prius+
and will drive most times with electric power.

(Prius+ menas 9kWh Lithium battery from
http://www.valence.com and 50km electric)

Photovoltaic price goes down about 7% a year.

Oil price goes up more than 10% a year.

At German gasoline prices, the point is already
reached where gasoline is more expensive
than electric power from a photovoltaic
for car driving.

Maybe one year more, and even high efficient
Diesel engine cars can at German prices
not compete with electric power from photovoltaic.

2007 or 2008 even cheap US gasoline will
be more expensive than electric power from
photovoltaic to drive a car, at last in the sunny
southern part of the country.

 

[daestrom]

Sometimes reporters skip important words and it makes what they
read, while perfectly understandable to most, sound like nonsense
to some.

I took that to mean the raw materials used to make PV, one of the
most critical being nearly pure silicon. While silicon mixtures are
very common on Earth, the pure stuff that is the raw material for
PV production is not. It's a raw material for production but not
a very "raw" material, if you get my meaning.

I agree. Probably more correct to say the 'feedstock' for PV production is
in short supply.

daestrom

 

[George Ghio]

Sometimes reporters skip important words and it makes what they
read, while perfectly understandable to most, sound like nonsense
to some.

I took that to mean the raw materials used to make PV, one of the
most critical being nearly pure silicon. While silicon mixtures are
very common on Earth, the pure stuff that is the raw material for
PV production is not. It's a raw material for production but not
a very "raw" material, if you get my meaning.

Anthony

The question is still; Why aren't enough SPs being made?

With a shortage and growing demand you would think that someone would be
rushing to fill the gap.

Someone here said that it took two years to set up a plant.

I first heard the word "Shortage" ten years or more ago.

Well?

It's not as if it is unknown technology.

No, there is money being made, now, from the deliberate lack of production.

And before someone starts shouting "Conspiracy" the real answer is just
that it is "Just business as usual".

Capitalism at work.

 

[George Ghio]

Silicon mixed with lots of other things is. Pure silicon is not. Saying
there's no shortage of pure silicon because impure silicon is everywhere
is like drinking seawater while stranded on a lifeboat because, well,
water is everywhere.

So where is the plant.

What?!?! That makes absolutely no sense! As I explained above, feedstock
manufacturers waited to build plants until they were sure of sustained
demand for feedstock. Feedstock manufacturers are not PV manufacturers
and really only care about PV to the extent that they can sell silicon
to it. They really couldn't care less about PV breakthroughs unless it
affects their sales volume. And in reality, a big breakthrough in
silicon PV would most likely *slow* sales of feedstock because it would
almost certainly reduce or eliminate the need for silicon.

Oh and, by the way, virtually nobody at any of the PV manufacturers
thinks there's going to be a "big breakthrough" in silicon PV.
Furthermore, no company run by sane people operates on a business plan
whose success depends on its competitors having even greater success at
some point in the future.

Ask the question, Who owns the patent? Then you find the money. When you
find the money you will see that boosting production (for private use,
that is you and me) at this time is of no interest to those that are
making the money.

IF you want a good insight into renewable energy do a google on "caddet".

On the contrary, many companies have been very interested in building
feedstock plants over the last five years. The problem was, they
couldn't do it without losing their shirts -- the price of silicon was
too low. Now the price is high enough and will stay high without new
capacity, so they're building plants like crazy. If the PV industry had
kicked in some capital earlier, it would have reduced the risk to other
investors and plants might have been built sooner, perhaps even soon
enough to have avoided the current problem. But few of them did, and
those that did put their money primarily into R&D rather than capital,
and now we're where we are.

Now why would anyone pour money into R&D when according to you
"virtually nobody at any of the PV manufacturers
thinks there's going to be a "big breakthrough" in silicon PV."

I never said that no new plant was being built. In fact, I said that
supply is expected to catch up with demand in 2006 or 2007. I also said
it takes close to two years to get a new plant up and running, so it
follows that plants that began construction last year or this year will
no really do much to alleviate supply problems anytime soon.

Don't hold your breath. Two years to get a plant up and running? I first
heard about the "Shortage" ten or more years ago. Shortage = demand.

If there is demand why is there no rush to fill it.

Because money is being made from the shortage.

 

[George Ghio]

The most stupid will pay the price at the pump.

The intelligent ones will buy rechargeable hybrid cars,
like the just introduced Toyota Prius+
and will drive most times with electric power.

How nice. The entire population of the world will go out and buy a new
car tomorrow.

Hell, not even in the US would that happen. Not even in one city.

(Prius+ menas 9kWh Lithium battery from
http://www.valence.com and 50km electric)

Photovoltaic price goes down about 7% a year.

Oil price goes up more than 10% a year.

At German gasoline prices, the point is already
reached where gasoline is more expensive
than electric power from a photovoltaic
for car driving.

Maybe one year more, and even high efficient
Diesel engine cars can at German prices
not compete with electric power from photovoltaic.

2007 or 2008 even cheap US gasoline will
be more expensive than electric power from
photovoltaic to drive a car, at last in the sunny
southern part of the country.

In your dreams

 

[George Ghio]

A: It makes a discussion impossible to read.

Q: Why is top-posting wrong?

I agree, but have decided to answer in kind.

Replying to George Ghio:

Then you would know that the PV industry, which does not *quite* require
the same quality of silicon as other solid state device manufacturers,
and cannot afford to pay anywhere near the price of the best quality
silicon, is in a bit of a bind. While demand was low, rejects and
leftovers from the microprocessor industry were enough. Now, PV
manufacturers need far more cheap, second-rate silicon than they can
expect other manufacturers to produce as a byproduct.

So you're saying that silicon for pv should be easier and cheaper to make.

So it follows that a plant to make said silicon would be cheaper as well.

So where is the money being made that makes building cheaper plant for
the manufacturer of less pure silicon uneconomical?

Where is the money?

 

[George Ghio]

Well, it seems that you are expert at "simplistic and ignorant" so it is
no surprise that you failed to understand.

The raw material is there in abundance. Raw Material - noun: Material
suitable for manufacture or use

Feed stock is made from the raw material. It is a secondary product.

Why is this not being done?

Because there is more money in other forms of energy.

The west seems to be more interested in lining their pockets than
ensuring a future for their countries.

Sort of like retailers who tell other people that one battery is better
than another based on the profit margin involved.

That has to be the most simplistic and ignorant answers you have made yet
George.

Are you saying that you can just scoop up a bunch of sand and glue onto
panels, or what?

Silicon being one of the most, if not the the most common mineral on earth
Sort of says it all.

[/QUOTE]

 

[Roland Mösl]

Look at it this way. If all (well most) transport runs on oil and the

How nice. The entire population of the world will go out and buy a new
car tomorrow.

It is usual to buy a new car every 10 years.

Hell, not even in the US would that happen. Not even in one city.

The oil advisor of president Bush wrote,
that the oil price will be soon at $250.

When You love Your gasoline engine so much,
You have the choice, it's only expensive.

As I wrote above, the most stupid will pay the
price at the pump.

As an example, in Austria are now about 80% of
new cars with Diesel engines

In your dreams

The numbers are on my site, You know this,
so Your only escape is to make stupid calls on it

 

[George Ghio]

And where does this diesel come from. Go on, have a guess.

 

[Roland Mösl]

And where does this diesel come from. Go on, have a guess.

It was an example how much the structure of the car market
changed in Austria in only 10 years.

I drive myself now a Seat Alhambra minivan with
around 38 mpg average.

Same car with gasoline engine is around 24 mpg

Rechargeable hybrid car will change the car market
completely.

We see now the very begining like the first VW golf
Diesel from 1977

 

[Paul Ciszek]

So you're saying that silicon for pv should be easier and cheaper to make.

Not necessarily. I said that leftovers and rejects from the electronics
industry were good enough for some PV processes. That's different than
intentionally making lower quality silicon.

So it follows that a plant to make said silicon would be cheaper as well.

Not necessarily. It might be that *setting out* to refine silicon to
that lower standard is not really that much cheaper than going all the
way and producing better stock that you can sell at a much higher price.

So where is the money being made that makes building cheaper plant for
the manufacturer of less pure silicon uneconomical?

Where is the money?

I suspect that anyone building a silicon refinery would rather shoot for
the much more lucrative electronics market.

 

[daestrom]

Don't hold your breath. Two years to get a plant up and running? I first
heard about the "Shortage" ten or more years ago. Shortage = demand.

If there is demand why is there no rush to fill it.

Because money is being made from the shortage.

That's just 'conspiracy' talk. No one is making money on the shortage.
Quite the contrary, the shortage isn't worth filling.

The reason no one is 'rushing' to fill the demand is simple. There isn't
enough money to be made filling the demand. Why invest in a PV plant to
fill the shortage if your money can earn a better ROI somewhere else?
Selling PV panels is highly competitive, even in the so-called shortage. If
someone could build a plant and sell PV at $10/watt, they would be 'rushing
in' to fill the shortage. But nobody can sell at that price, the demand is
just too elastic.

Because of the competition, a plant builder would have to amortize the cost
over several years. That, and the uncertainty of the input feed-stock means
higher risk. Higher risk means investors expect a higher ROI and that just
isn't there. So no investments.

daestrom

 

[Paul]

Here is some data on PV manufacturing payback.
http://www.nrel.gov/ncpv/pv_manufacturing/investment_recovery.html

 

[Paul]

As I understand, the conventional wisdom among feedstock producers is that
it *is* cheaper, though not by as much as the PV industry would like. Of
course, every dollar counts, plus having factories configured for PV-grade
silicon will prevent those manufacturers from favoring the
microelectronics industry. It would also insulate the PV industry, to some
extent, from the ups-and-downs of the microelectronics industry. Since
existing capacity is enough to service the microelectronics industry, a
good deal of the new feedstock capacity being built right now is for
PV-grade silicon.


I'm not convinced that the electronics market is so much more lucrative.
Already, the PV industry represents 40% of the polysilicon market
(according to SEIA). That fraction is only going to grow, as solar cells
use far more silicon per device than microelectronic devices, and the PV
industry is growing much more rapidly. It really won't take a large
silicon PV industry for PV to be the dominant silicon customer.

As a point of interest, Cypress Semi recently bought Sunpower.
Perhaps they saw a good way to make money on PV as well as semi chips.
http://www.sunpowercorp.com/html/

 

[George Ghio]

Well, let's see, there's one in Montana, one in Michigan, a couple in
Norway, one in Germany, at least one in Japan ... what are you getting at?

Ok, why is there a shortage, still after 10 years?

What patent? The one on making silicon feedstock? I'm quite certain that
one expired long ago. I believe some companies have patented methods of
making PV-grade silicon, but each of them are simply using their own
patented methods.

How long does a patent last? How old is the current technology.

Then you find the money. When you



Actually, some of the companies that have developed methods of making
PV-grade silicon have no production to increase at this time. If they
want to make money off their methods, they *need* to build new plants.
And they are.

Yes they are. So where are the panels?
Ok why the R&D? According to you no one is looking for a break through?
Which is it, looking or not?

Because R&D is doing an excellent job of bringing about incremental
improvements. It is far simpler to make several small improvements that
reduce costs by $1/W than to wait for a big breakthrough to do the same
-- particularly when the small improvements are fairly obvious and
nobody has any idea what the big breakthrough might be.

Yes we can see that a dollar a watt is coming. Has been for years.

You might have heard that a shortage was forecast, but if you heard
there was actually a shortage ten years ago you heard wrong. The silicon
shortage the PV industry is experiencing now began in August 2004.

What a load of nonsense.

Now that I think about it, I suspect you're confusing the difficulty PV
manufacturers have had keeping up with demand for PV modules with the
difficulty silicon feedstock producers have had keeping up with demand
for silicon feedstock. For quite a few years now, PV manufacturers have
not had the capital to expand their plants fast enough for production to
keep up with demand. While this has caused delays in producing modules,
as far as I know the manufacturers had not promised modules they could
not deliver. Now they can't get enough silicon to keep up with the
manufacturing capacity they have, which has continued to expand, and it
sounds like they have sold modules, then found they don't have the
silicon to produce them.

Two different problems with two different causes.

Well according to you SP manufacturers are only using second grade
silicon leftovers from the electronics industry. And here you say that
BP or Shell do not have capital to invest.

What makes you think there's no rush to fill it?



I can think of SO many ways that this statement is naive. There is a
HELL of a lot more money to be made from a healthy PV industry than from
taking advantage of a short-term price increase. Even if the current
players in the feedstock industry didn't want to fill the gap, this
would represent a HUGE opportunity for anybody looking to get into the
market. And while I criticize the PV industry for not doing enough prior
to the shortage, you can bet it wouldn't stand around and patiently die
because its suppliers decided to engage in a little profit-taking.

In short, if you think it makes business sense for *anybody* to
encourage the shortage, you're nuts. If one company had a monopoly on
silicon feedstock you *might* be able to make a case, but with multiple
companies holding a stake there is much much more to be gained from
meeting the demand. That is economics 101.

Which brings us to China. They already have America's manufacturing base
so why not give them your future energy base as well?

Now the demand that will be met will not be supply to let the masses set
themselves free of energy bills.

 

[George Ghio]

That's just 'conspiracy' talk. No one is making money on the shortage.
Quite the contrary, the shortage isn't worth filling.

The reason no one is 'rushing' to fill the demand is simple. There isn't
enough money to be made filling the demand. Why invest in a PV plant to
fill the shortage if your money can earn a better ROI somewhere else?
Selling PV panels is highly competitive, even in the so-called shortage. If
someone could build a plant and sell PV at $10/watt, they would be 'rushing
in' to fill the shortage. But nobody can sell at that price, the demand is
just too elastic.

Because of the competition, a plant builder would have to amortize the cost
over several years. That, and the uncertainty of the input feed-stock means
higher risk. Higher risk means investors expect a higher ROI and that just
isn't there. So no investments.

daestrom

There is no conspiracy. Just business as usual.

No, the investments go elsewhere. Money made from the shortage.

 

[George Ghio]

supply & demand; dollar balancing; takes money to make money.

when the raw material exists, and it pays to do it, people will do it.


~ just like water. in time, maybe 1000 years, we'll get energy out of
water.

Never heard if Hydro Electricity

 

[George Ghio]

Not necessarily. I said that leftovers and rejects from the electronics
industry were good enough for some PV processes. That's different than
intentionally making lower quality silicon.




Not necessarily. It might be that *setting out* to refine silicon to
that lower standard is not really that much cheaper than going all the
way and producing better stock that you can sell at a much higher price.




I suspect that anyone building a silicon refinery would rather shoot for
the much more lucrative electronics market.

Ah, I see. You support the theory of money from other investment than PV.

 

[George Ghio]

Actually, plenty of people think the shortage *is* worth filling, which
is why PV module shipments grew nearly 70% last year. The problem is
that there's not enough money in the industry to catch up all at once.
There are several logical reasons for that -- just because there's a
shortage doesn't mean there's a risk-free investment opportunity -- but
capital continues to flow into the industry. Ultimately, manufacturers
have been forging ahead with their expansion plans this year, but they
won't actually be able to use the new capacity until their silicon
supply problems are fixed.



Actually, I would say that it isn't very competitive at all. For the
past 5 years or more, many (if not most) PV manufacturers have had their
entire production runs sold as much as two years in advance. The
salespeople working out of the plants have said that they've been
reduced to order-takers because they don't actually have to sell
anything anymore. A new manufacturer pretty much just has to build a
plant and hang a shingle to be successful (see Q-Cells and Isofoton, who
became two of the largest manufacturers in the world with hardly anybody
even noticing).



I'm guessing there probably are ROI issues at the moment, caused by the
polysilicon shortage. Prior to that, with manufacturing costs falling
and retail costs holding pretty steady, I think ROI was probably pretty
good. Manufacturers *have* been raising prices in order to compensate
for higher expenditures on polysilicon which, at the very least, signals
that their ROI would be less than desirable if they did not raise prices.

Spoken like a true stockholder

 

[George Ghio]

George, you keep talking about this shortage, as if there has been a
shortage for the last ten years, however the NYT article that started
this thread contradicts this. It says:

"For all the years I've been doing this," said Daryl Dejoy, owner of a
solar installation company in Penobscot, Me., "I could get all the
solar panels in the world and no customers. Now I have all the
customers in the world and no product."

If you think there has been a shortage for 10 years, please provide some
proof, because the only proof I see is that NYT article that contradicts
you.

Well, no it doesn't. After nearly twenty years of using, designing and
installing solar power systems the excuse for pricing of SPs has always
been the shortage of silicon billit. Not much has changed.

Maybe there was a shortage 10 years ago, but it appears that was
resolved up until recently, when demand started growing at 40% a year
after new incentive programs were put in place. These incentives caused
a sudden increase in demand that the industry wasn't prepared for, and
given that it takes a couple of years to put a new plant in operation,
it's not surprising there would be shortages for a couple of years. With
more incentives being introduced in other areas, this just makes the
problem worse. In time, it should work itself out.

Maybe there was, then again maybe there wasn't. But it has always been
the excuse. Which is the real point. Nobody in the energy industry cares
if you can get panels to go on your roof. What they care about is their
profit.

Right, and who do you think is going to increase production capacity? If
you think this is so easy, why don't you go into the production business
yourself. It's a free market, and if you think you have a money-making
opportunity, take advantage of it. This is exactly what all the
companies currently in the business are doing. If they think there's
money to be made, and the demand will still be there after they can get
a new plant online, they'll expand production. Nobody is going to
invest in a plant if they don't expect to make money on it. There are
multiple manufacturers, and unless there's collusion or price-fixing
between them, which I see no evidence of, production should increase
until profit margins get low enough to discourage additional entrants
into the business. It's the way every competitive industry works. The
reason it hasn't worked itself out yet is because we're too close behind
rapid increases in demand caused by enactment of new incentives that
created many more customers overnight, and because increasing capacity
requires a large investment in plant and equipment, and time for
construction. The plants to produce this equipment aren't cheap.

And you believe this nonsense. Do you even have an idea how much
photovoltaic is being installed around the world? Do you care?

Search "caddet" then you will at least know what the industry is doing
world wide.