Rising polysilicon prices have resulted in record prices for solar silicon wafers, which will drive demand for solar thin film panels, thus aiding thin film equipment suppliers according to the study, "Opportunities in The Solar Cell Market For Thin Film Technology," recently published by The Information Network.

“In the past two years we have witnessed a stampede of startups entering the solar cell market using thin film technology because of a shortage of polysilicon material used to make crystalline cells,” noted Dr. Castellano, President of The Information Network. “During this period, polysilicon manufacturers have quickly ramped up production.”

Nevertheless, prices of solar silicon wafers have gone above $9.25 for a 6-inch wafer because the polysilicon spot market prices have gone above the $400 per kilogram level. That’s up from $300 per kilogram in December 2006. While solar silicon wafer suppliers have passed on price increases to their customers, the solar panel manufacturers are finding it difficult to pass on increases to their customers, the system integrators and consumers, in an already highly government-subsidized industry.

The report notes that despite high solar silicon wafer prices, thin film technology is not without its problems and limitations. Key points in the solar industry are efficiency and costs. Traditional crystalline and polycrystalline silicon solar panels with efficiencies between 15% and 22% compare to thin film amorphous silicon of 6% to 7%, which will possibility increase to 10% efficiencies in 2009 using bilayer micromorph structures. CdTe (cadmium telluride) technology, led by First Solar, is already achieving these efficiencies. Thus, amorphous silicon is two years behind CdTe.

While CdTe technology is competitive with crystalline silicon in open area applications such as solar farms in Southwestern U.S. and Europe, there are issues that could impact CdTe technology in the future. First of all, Cd is extremely toxic. Secondly, there is a severe shortage of Te. Statistically about 160 to 215 metric tons of Te are mined each year, and CdTe solar panels utilize approximately 135 tons per gigawatt of solar power, equivalent to 63% to 85% of worldwide Te production! Thirdly, Cd, but not CdTe is one of six hazardous substances listed in the Restriction of Hazardous Substances Directive or RoHS, a European Union environmental regulation that took effect on July 1, 2006. If the EU reviews their RoHS restricted product list and puts CdTe solar panel into the restricted list, the market for CdTe solar panels will vaporize.

Solar equipment suppliers such as Applied Materials and Oerlikon are selling amorphous silicon technology. Crystalline silicon is a clear winner in area-constrained applications such a building structures, while amorphous silicon is used largely in non-area constrained applications. As the shortage of polysilicon dissipates, due to ramped production and a semiconductor slowdown, prices of crystalline silicon solar panels will drop and become economically competitive with thin film technology in applications such as solar farms.

“Power companies would prefer wiring together 200W crystalline panels instead of three to four 60W amorphous silicon panels to meet the same power needs,” added Dr. Castellano. “On a per watt basis at the panel level, crystalline panels are only about 60 cents more than amorphous panels. At the system level, crystalline has the cost advantage.”

The Information Network is a leading consulting and market research company addressing the semiconductor, LCD, HDD, and solar industries.

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