Solar silicon could see 43% price drop

We’ve been hearing for awhile that solar silicon production is going from scrambling to catch up, to having way too much stock. Now we have an idea how much the prices are expected to fall.

According to information provided to UK’s New Energy Finance by polysilicon and solar-wafer buyers and sellers, solar silicon could drop in price by as much as 43% next year. Additionally, silicon wafer prices could drop 41% -- and contract silicon prices dropping by 67% -- in 5 years. In New Energy Finance’s report, wafers should retain their value in 2009, but as supply increases, prices could hit less than $6 per wafer or $1.62 per watt starting in 2011.

So just as quickly as prices skyrocketed, they’ll drop again (sound like the housing market to anyone?), which means price parity for solar could be just around the corner, despite various setbacks.

"The first results [from the Silicon and Wafer Price Index] have confirmed that we will be seeing significant falls in prices right along the value chain as the polysilicon bottleneck eases, bringing solar closer to competitiveness with other power sources," New Energy Finance CEO Michael Liebreich said in a written statement, and carefully pointed out that the research is specific to contract prices, not spot prices for silicon.

We know that companies are interested in manufacturing the in-demand product, but will production slow at all in preparation of this over-supply? No matter what, it’s a sure bet that solar power prices will drop, so we can hope that the (so far) lack of tax credits will not be such a big factor stopping people from hooking up to the sun.

Via GreenTech Media; photo via Treehugger