Competition for Polysilicon

by Paul Chesser, Heartland Institute Correspondent on June 17, 2008

in Blog

Paul Chesser, Climate Strategies Watch

My colleague at the John Locke Foundation, Geoff Lawrence, in a blog post today looks at economic modeling for costs of solar power as North Carolina lawmakers last year were putting together a renewable portfolio standard law for the state's utilities. His analysis shows that modelers were way off:

The model they developed included scenarios in which the price of solar power (the most expensive form of electricity production) declined by 25, 50, and 75 percent by year 2021.

These projections likely made the solar set-aside more palatable to consumer groups. However, they have little basis in reality. The primary chemical input into production of solar panels is polysilicon – the same chemical that is used to manufacture microprocessors.

Limited supplies of this chemical are resulting in a global shortage as more of the chemical is demanded for solar panel production. As a result, the price has increased from $20 per kilogram to $300 per kilogram over the past five years and continues to rise. The solar panel industry has grown into a major competitor with microprocessor manufacturers for this resource and is starting to bid polysilicon away from microprocessor manufacturers. Government mandates for solar power will undoubtedly cause this trend to accelerate.

These guys were about as good as all those global warming modelers!


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