Solar Tech Times

The price of silicon, the material at the core of most solar products, is dropping, says a report to be released by New Energy Finance. Jenny Chase, a senior associate at the firm, says spot prices have fallen to one-half or even one-third of their prices late last year, bringing them below longer-term contract prices, reports earth2tech. As a result, some solar companies are renegotiating their silicon contracts to get prices more in line with those spot prices, and some silicon companies have started offering their customers more silicon for the same price.

“There is certainly evidence that spot prices have fallen and contracts which were thought to be quite firm are starting to be looked at again in a new light,” Chase says, according to earth2tech.

More from earth2tech:

But low silicon prices could be both good and bad. They would mean lower costs for solar manufacturers, which could enable them to become more competitive with conventional electricity, in turn growing the solar market. But they also could indicate lower profit margins and more competition in the short-term, if they represent an oversupply compared to demand. Either way, they most certainly would represent change and a market shakeout that could put new winners on top.

The news from New Energy Finance comes after some conflicting evidence that prices could actually be rising. According to Ed Gunther, author of the Gunther Portfolio blog, Rogol reported last week that silicon spot prices averaged between $100 and $180 per kilogram in the first quarter, compared with long-term contract per-kilo prices that range from $50 to $90. “This appears to signal polysilicon is not in oversupply,” Gunther wrote. “Otherwise, the spot price would have crashed below the long-term contract price.” Rogol also forecast that spot prices would climb to between $125 and $250 per kilogram during the rest of the year, he wrote.

Here’s the story from earth2tech.