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Solar panel makers boost polycrystalline silicon industry

Leading manufacturers provide much-needed help as they invest in measures to improve the conversion efficiency of locally available crystals. Reduced costs are a bonus.

The world's largest solar panel supplier, China continues to rely on imported polycrystalline silicon despite an oversupply of domestically produced versions. But major solar panel players aim to change that.

Solar panel makers boost polycrystalline silicon industry
Solar-powered warning lights from Shaanxi Double Wise carry the CE mark.

Due to technology issues, local variants do not convert power as efficiently as their overseas-made equivalents. They are more expensive as well. So despite incorporating polycrystalline silicon from Germany or Japan, solar panels from China are priced roughly 10 percent lower.

Now, a handful of the country's leading solar panel manufacturers are working to improve the quality of domestic crystals.

Yingli Green Energy Holding Co. Ltd, for instance, is planning to mass-produce polycrystalline silicon using a silane method that was enhanced in-house. The process is said to have low electricity consumption and reduce polycrystalline silicon manufacturing costs to between $25 and $35 per kilogram. Although this is still slightly higher than the $22 to $30 per kilogram production outlay at overseas factories, less expensive shipping and tax fees in China can result in lower-priced domestic polycrystalline silicon.

At the same time, Yingli, along with Suntech Power Holdings, is working on increasing the power conversion efficiency of monocrystalline silicon solar modules from 16 percent to 18 or 19 percent over the next three years. Compared with polycrystalline silicon, monocrystalline is generally better at transforming energy from the sun into electricity.

In addition, many of the large solar panel companies are including thin-film solar cells, which are believed to be more efficient than crystalline silicon, in their R&D targets.

China's solar revolution

Polycrystalline silicon factories began mushrooming in China in response to the shortage in late 2006, with approximately 40 new plants constructed between 2008 and 2009. Such facilities, however, are not outfitted with sophisticated equipment that will enable them to be on a par with their foreign counterparts. As a result, output consists mainly of low-end polycrystalline silicon, most of which does not meet export requirements for power conversion and pollution emissions.

The advanced machinery and recycling technology at overseas factories, meanwhile, drove down any cost advantage China suppliers may have had. Chinese Renewable Energy Society vice president Meng Xian Jin said at foreign plants, only 150kWh is needed to process the crystals. In contrast, local factories consume at least 200kWh. Further, manufacturing facilities in Germany and Japan can recycle waste material and still yield 99.99 percent pure polycrystalline silicon, something China companies cannot do.

As a result, the price for a kilogram of polycrystalline silicon is $50 for local versions and $48 for imported variants.

Customs statistics showed China procured roughly 50 percent of polycrystalline silicon requirement from Germany and Japan in 2009. For this year, approximately 1,000 tons are being imported every month.

Grid connected PV inverter supplier Beijng Corona Science & Technology Co. Ltd projects demand for solar panels to grow 30 to 40 percent annually for the next three years. Growing orders have pulled up solar cell costs by 1.4 percent, averaging at $1.42 per watt. This, however, is not expected to affect prices of finished goods, even if rising labor costs are factored in.

Shaanxi Double Wise Digital Science & Technology Co. Ltd, a solar lighting solutions company, said quotes have remained unchanged since 2004. Its solar-powered sea or airport warning lights are still at $73 to $118 per set.

Xi'an Shengtang New Energy Co. Ltd said prices for its solar-powered lights will be kept stable for the rest of the year as well.

Note: This article "Solar panel makers boost polycrystalline silicon industry" was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.

All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.

Disclaimer: All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. We, our affiliates, and our affiliates' respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party.

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