Thursday, February 09, 2006

Solar growing pains--the silicon factor

(Silicon ingots)

Hello future solarDwellers:

There's been a lot in the news lately about the near term constraints the lack of silicon production is putting on the solar market. (see Business Week, FEBRUARY 6, 2006 What's Raining On Solar's Parade)

You might have heard that since demand, especially from Germany, has increased so much for solar panels and the silicon they use, that there is now a shortage in production of these panels. From what I've read, it looks like there will be more demand than supply through 2007.

The assumption now is that since states like California and places like Germany are making long-term commitments to back favorable solar policies, that silicon/panel producers will invest in increased production; but it takes time for the new supply to reach the market.

It's just a fascinating mixture of factors going on the market right now: slowly increasing silicon prices, making solar panels more expensive, but with the best state/federal rebates in years. The net effect, even with increasing silicon prices, there is the new federal solar tax credit, is still the chance to have a final cost that is lower than you could have done last year on a fully installed solar pv system, especially for commercial solar (which I spoke about in my last post)

--the solarDweller


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