Polysilicon is a harsh mistress

High prices for the crucial ingredient were supposed to hurt solar power's growth. Now, so are low prices.

By Andrew Leonard

Published June 3, 2009 10:11AM (EDT)

In keeping with the tradition started on the the very first day of How the World Works I remain devoted to bringing readers all the latest news about polysilicon -- a key ingredient in both semiconductors and photovoltaic panels.

You may recall that skyrocketing polysilicon prices were supposed to strangle solar power's growth. That didn't happen.

But now, Reuters is reporting that polysilicon prices have fallen so far that solar power is in trouble again -- or, to be precise, that segment of the solar industry that specifically steered away from dependence on polysilicon -- so called thin solar.

A collapse in silicon prices threatens to put the heat on solar panel makers that use little of the material, such as Japan's Sharp Corp and even low-cost industry darling First Solar Inc.

Spot prices on the solar industry's key raw material, polysilicon, have halved since January, giving a leg up to solar panels that rely heavily on the material.

Thin-film solar panels, made with little or no polysilicon, are starting to lose their competitive edge over China-made silicon-based modules, which are more efficient in transforming the sun's rays into electricity.

High-priced or low-priced, polysilicon appears to be a real pain in the solar posterior.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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