(Bloomberg News) Polysilicon may be headed for a surprise recovery by 2015 that could push up the prices of solar panels, said Solairedirect SA, France's second-biggest sun-powered generator.
Suppliers of the commodity used in solar panels and microchips have been shutting down capacity or delaying new plants, which can take at least three years to build, said Thierry Lepercq, chairman of the Paris-based utility backed by Schneider Electric SA's venture capital arm.
That could coincide with a surge in demand for solar panels as the price of sun-based electricity converges with fossil fuel-based power in many markets by 2015, he said.
"We have to be wary about it," Lepercq, referring to an unexpected rise that could cause a surge in equipment and project costs, said in an interview in Mumbai. "Even if it doubles, it changes the picture."
Polysilicon prices have plunged 94 percent in three years as the top five producers, led by Hemlock Semiconductor Corp. and Wacker Chemie AG, more than doubled output, according to Bloomberg New Energy Finance data. Prices may be stuck near the cost of production for years, Paul Leming, director of research at Ticonderoga Securities in New York, said in November.
Global polysilicon production capacity is likely to settle at about 300,000 metric tons, Lepercq said this week. Wacker of Munich, OCI Co. of South Korea, GCL-Poly Energy Holdings Ltd. of China and Renewable Energy Corp. ASA of Norway had the capacity to make 131,000 tons of polysilicon last year, up from 50,000 tons in 2008, Bloomberg data shows.
'It Happened Once'
Polysilicon suppliers that survive the supply glut will likely become profitable businesses again unlike equipment makers using the material such as China's Suntech Power Holdings Co. and JA Solar Holdings Co., the largest solar cell maker, Lepercq said.
"Cells and modules are the absolute commodity," he said. "People in that business who earned money have to put that in their memories, say it happened once and honestly it won't happen again."
The shares of the five-biggest panel makers are down 69 percent this year, according to data compiled by Bloomberg, as overcapacity slashes margins and shrinking clean-energy subsidies in Europe deflate demand in their biggest market.
"You can increase cell and module capacity at the snap of a finger, unlike polysilicon," Lepercq said.