EERE Network News - 8/23/06

Renewable Energy Corporation (REC) started construction last week on a new $600 million production facility for solar grade polysilicon in Moses Lake, Washington. The plant will nearly double the company's polysilicon production capacity, adding 6,500 metric tons to bring total capacity to close to 13,000 metric tons. Solar grade polysilicon is the raw material used to produce most solar cells, and REC's polysilicon is used in 20 to 25 percent of all solar cells in the world. Once the new facility is brought online, one year's production will yield enough solar cells to power about 75,000 homes.

REC's expansion is part of a worldwide push to increase manufacturing capacities for polysilicon and to lock in polysilicon supplies for solar cell manufacturers. In June, another polysilicon supplier, Germany-based Wacker, announced plans to increase its annual polysilicon production by 4,500 metric tons to total 14,500 metric tons by the end of 2009. In July, SunPower Corporation and ErSol Solar Energy AG both made long-term deals for polysilicon supplies that will allow the solar cell companies to each achieve an additional production output of at least 300 megawatts (MW). And SolarWorld AG plans to nearly double its annual production of solar silicon wafers to 350 MW by 2008, drawing in part from a facility that can produce 1,200 metric tons of solar polysilicon from lower-grade polysilicon and recycled polysilicon scraps. The company has also entered into a joint venture with Degussa AG to begin producing solar grade polysilicon starting in 2008. SolarWorld AG recently finished acquiring the Shell Group's assets for producing polysilicon solar cells.

This expanded production capacity in the solar industry is largely in response to an increasing demand for solar power and materials that is not being met by the supply. Photon Consulting's 2006 Solar Annual report predicts that solar power demand will "significantly exceed supply" through 2010. Demand today is estimated at 5,000 MW, with a supply of only 2,400 MW, but demand in 2008 is estimated to reach as high as 10,000 MW, while supply may only reach 5,000 MW. As the industry ramps up production, the company projections point to a total capacity of 10,000 MW by 2010.

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