Sustainability Report - Bank Sarasin-Alpen

Solar Energy 2005
able. This shortage of raw material obviously gives silicon manufacturers the upper
hand: they will be able to improve their margins over the next 2-3 years and
consequently see their earnings rise dramatically. This will be to the detriment of
end customers of solar systems, as it is almost inevitable that the higher silicon
prices will be passed on down the value chain and ultimately forced onto by the
end buyer.
Fig. 2: Production capacities for solar-grade silicon and maximum PV cell production
2004 2005 2006 2007 2008 2009 2010
Solar-grade silicon production (t) 6'800 9'100 10'300 15'000 16'200 22'200 26'200
Inventories (t) 4'500 3'500 2'500 1'000 300 200 200
Scrap material from the semiconductor industry (t) 2'988 2'733 2'886 2'748 4'028 5'040 5'350
Total quantity available for solar industry (t) 14'288 15'333 15'686 18'748 20'528 27'440 31'750
Amount of silicon per Wp (t) 13.0 12.0 11.0 10.2 9.5 9.0 8.5
Total silicon-based PV cells (MWp) 1'099 1'278 1'426 1'838 2'161 3'049 3'735
Proportion of silicon-based PV cells 92% 91% 88% 89% 90% 91% 92%
Maximum potential PV cell production (MWp) 1'195 1'404 1'620 2'065 2'401 3'350 4'060
Potential PV cell demand (MWp) 1'320 1'603 1'944 2'336 2'702 3'182 3'848
Source: Sarasin, 2005
PV industry: expansion or
vertical integration?
Supply shortage must not result
in poorer quality
More efficient use of silicon and
investments in alternative
technologies
With raw materials in such short supply, larger producers of PV cells and modules
obviously have a stronger negotiating position – in relative terms – and can
exploit their purchasing power more effectively than the smaller players. We
therefore expect that the major PV cell producers will be able to expand their
market shares significantly in the coming years. There will also be a certain
amount of industry consolidation. Under these circumstances a strategy of increased
vertical integration by acquiring suppliers becomes more attractive, in
order to secure better access to the desired pre-production materials (ingots and
wafers). The companies that manage to anticipate the supply bottleneck in good
time and make advance provisions for it will still manage to grow and capture a
bigger share of the market.
The industry agrees on one thing, however: on no condition may the current silicon
bottleneck be allowed to compromise the quality of PV products. Rapidly organised
but sub-standard raw materials would have disastrous consequences
for the entire solar industry.
Because of the shortage of silicon, as well as for cost reasons, the PV industry is
working hard to steadily reduce the specific amount of silicon required for each
unit of capacity. Big efforts are being made to minimise scrap when sawing silicon
wafers, to cut the wafers themselves more thinly, to increase the use of
more direct production methods, such as EFG (Schott) or string ribbon (Evergreen
Solar), and to develop more efficient solar cells. Similarly, alternative solar
technologies not based on crystalline silicon will benefit in the long run from further
increases in the price of solar-grade silicon. In the medium term it is in the
solar industry’s interest to build up an adequate supply of cheap silicon that is as
independent as possible from the semiconductor industry. There is thus virtually
no other choice for companies than to participate financially in a secured supply
of solar-grade silicon.
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