The shortage of silicon is a big topic among advocates for solar power these days. Silicon is the key raw material used to manufacture the photovoltaic panels that most existing solar systems use to convert sunlight into electricity.
With customers anxious to take advantage of temporarily high rebates and get systems up on their roofs, installers find themselves relying on carefully cultivated relationships with wholesalers in order to get equipment to install. Newcomers may find themselves locked out.
In its infancy, the solar panel industry could feast on leftover silicon supplies from an industry that had grown up to fill the needs of makers of computer chips.
But no more. Solar has taken off, spurred by government subsidies in Germany, Japan and California. The portion of silicon supplies consumed by solar makers has grown from 10 percent to about 40 percent. That surging demand has driven the average price of silicon up from about $30 a kilogram five years ago to about $70 a kilogram currently, said Richard Winegarner, president of Sage Concepts, a market research firm in Healdsburg.
Winegarner predicted that the market would remain “very tight” until 2008, when new silicon plants are scheduled to open, and is likely to remain tight for two years after that.