Prices for polysilicon, the raw material used in photovoltaic solar cells, keep plunging thanks to abundant supply and weak demand. It’s not just spot prices that are falling, but renegotiated contract prices also, says New Energy Finance, London-based clean-energy analysts.
“The new contract price of silicon for delivery in 2009 is down some 50% on that contracted for a year ago and now close to the spot price of $67/kg, equivalent to $0.50 per watt,” wrote NEF in a note today. The old contract prices averaged $150 per kilogram, while spot prices had jumped to $300 per
That may be bad news for the companies that process silicon—they’ve been squeezed by falling prices for their product since the credit crunch and a collapse in key solar markets. But it could be good news for the sector as a whole, notes NEF:
These prices suggest that leading manufacturers of crystalline silicon PV modules can afford to sell below $2/watt and still make a small profit. This is half the price of modules in 2008, making PV much more competitive with fossil fuel-generated electricity and much more attractive under subsidy regimes designed for 2008 prices.