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Businesses Power The Almighty Buck

Solar Companies Are Scrambling to Find a Critical Raw Material (bloomberg.com) 134

Solar manufacturers are being battered by higher costs and smaller margins, after an unexpected shortage of a critical raw material. From a report, shared by an anonymous reader: Prices of polysilicon, the main component of photovoltaic cells, spiked as much as 35 percent in the past four months after environmental regulators in China shut down several factories. That's driving up production costs as panel prices continue to decline, and dragging down earnings for manufacturers in China, the world's biggest supplier. "There's just not enough polysilicon in China," said Carter Driscoll, an analyst who covers solar companies for FBR & Co. "If prices don't come down, it will crush margins."

Solar Companies Are Scrambling to Find a Critical Raw Material

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  • The market corrects (Score:4, Informative)

    by OrangeTide ( 124937 ) on Monday November 13, 2017 @05:48PM (#55543571) Homepage Journal

    If the processing becomes profitable enough then factories will open up, perhaps outside of China. The finance situation has made poly-Si briefly (and artificially) cheap. If there is demand then people will pay more and investment can start again. Right now it's just too cheap to bother investing in a factory.

    • by Calydor ( 739835 )

      It sounds like the factories were shut down for being too polluting.

      In China.

      Are you sure the processing can be done in a clean, let alone profitable, way?

      • by ShanghaiBill ( 739463 ) on Monday November 13, 2017 @07:02PM (#55544113)

        Are you sure the processing can be done in a clean, let alone profitable, way?

        It can and is done cleanly. Polycrystalline silicon is manufactured worldwide, including in the US. Outside China it is mostly higher quality "electronics grade" rather than lower priced "solar grade", but it is routinely done with more stringent pollution controls than was previously acceptable in China.

        Collecting the volatiles, and cleaning up and recycling the wastewater has a cost, but if everyone is required to do it, the cost can be pushed downstream to the panel manufacturers, and they will pass it on to their customers. This is not a solar showstopper, but it will make panels a bit more expensive.

        Does anyone else think it is silly that something made in factories is called a "raw material"?

        • Does anyone else think it is silly that something made in factories is called a "raw material"?

          Would you consider steel to be a raw material? Sure it's a refined output in one sense, but it's absolutely a raw material in another.

          • by skids ( 119237 )

            In "terms of art" it probably isn't considered a "raw material" but a "manufactured material" or "natural manufactured material"

        • by Togden ( 4914473 )

          Does anyone else think it is silly that something made in factories is called a "raw material"?

          Its raw within the context of the process.

      • China has known about these pollution problems at least since 2008 [washingtonpost.com], probably even longer. But silicon tetrachloride is an environmental "show stopper" if not reprocessed...it's worse than the old Roman idea of "salting the land". Nothing grows, animals die, etc. ST can be used for other purposes (like making fiber optic cables) but that requires vertical planning in your manufacturing sectors.
        • Re: (Score:2, Interesting)

          But silicon tetrachloride is an environmental "show stopper" if not reprocessed...it's worse than the old Roman idea of "salting the land". Nothing grows, animals die, etc.

          Silicon tetrachloride is a volatile liquid, that quickly evaporates ... and it degrades in the presence of water to SO2 and HCl. So I am skeptical that it could stick around long enough to cause significant long term harm. Do you have a citation for its supposed Carthaginian properties?

          • Here's an MSDS [airgas.com]. This one says nothing about ecological impact. But I suppose it would form longer-lived organosilicates.

        • But silicon tetrachloride is an environmental "show stopper" if not reprocessed

          Not reprocessing it is idiotic. Not only do you have to store it somehow if you don't reprocess it but you're also losing shitloads of extra silicon that you could sell from it.

          • You don't have to store it if you're just dumping it somewhere... which is exactly what these plants were doing (apparently)

            • But then you're ditching a valuable byproduct. It can only be worth doing in pathological business/legal/economic environments such as China. And only if nobody is watching. Anywhere else it's the stupidest idea ever.
      • Just because these particular plants decided to make even more profit at the expense of being dirty as fuck, doesn't mean that it can't be done in a non-dirty-as-fuck manner and still turn (less) profit.

        These assholes just decided to either take a bigger margin, or undercut competition with literally dirty business.

      • Are you sure the processing can be done in a clean, let alone profitable, way?

        Yes, it can. [chemicals-technology.com] Any other question?

    • by Rei ( 128717 ) on Monday November 13, 2017 @06:19PM (#55543805) Homepage

      I bet Silicor really regrets not building their new Iceland plant (they backed out because the price of polysilicon just couldn't support it). They had a really cool technology; I wouldn't support the building of an old-fashioned silicon producer near me (we have a couple in the country; they're pretty terrible), but I supported them. Basically it's based around aluminum alloying; they dissolve impure silicon in aluminum, then cool it (settling it out as flakes, which they skim), then etching away residual aluminum from the flakes with hydrochloric acid. It's then re-melted one more time to separate out any residual aluminum. In addition to the silicon, the process byproducts are silicon-rich aluminum alloys (which are worth more than the original aluminum) and polyaluminum chloride (used in water treatment).

  • by Anonymous Coward

    The absolute MURDER of the environment by Chinese industry to make cheap toasters (solar cells this time around) has finally caught up with the market in a negative fashion. Who would have thought eventually they would care about all the dead children?

    • by swb ( 14022 )

      I think Uncle Xi is really serious about corruption and pollution, and my guess is where you have excess pollution you also have corruption.

      Xi may be willing to take on some polluters at the cost of higher product prices if he can push those costs onto foreign consumers due to lack of competition. This externalizes the costs of cleaner production. Busting local officials taking bribes in exchange for allowing the pollution helps his image and further solidifies his power.

  • Skimming the article, it looks like the country painted itself into a corner.
    • Indeed. It's not really a raw materials problem as an intermediate materials problem. What the industry lacks is domestic polysilicon. They could buy from the US and South Korea if their trade policies didn't make those sources so expensive.
  • by SuperKendall ( 25149 ) on Monday November 13, 2017 @06:02PM (#55543677)

    How horrific does the pollution from a plant have to be before regulators in China shut it down? It really makes you wonder how much pollution from this process was being overlooked.

    • by Anonymous Coward

      China has been cracking down and cleaning up since the late 2000's. You're expecting pristine lakes that turned to a pool of black sludge to turn back to a pristine lake over night and the policies to catch up that fast as well?

      • More like, I wasn't expecting China to be doing any real cracking down at all so the closures come as a bit of a surprise to me (though a sign that perhaps the efforts are getting more real).

      • by Anonymous Coward

        No they have been cleaning up for the last five years because that was part of their last five-year-plan. Now there is a new one whose full details have yet to be released.

        Don't lie. Educate yourself.

        #simplethings

    • How horrific does the pollution from a plant have to be before regulators in China shut it down?

      Don't bring 2000 era daft bias into the conversation. Every society has followed the same path, from the USA to Germany, Japanese, and now Chinese. There were borderline uninhabitable places in major US cities due to pollution from lack of environmental regulation. Where are they now? Cleaned up as the economy evolved and the country transitioned.

      China is going through much of the same. Major investment in green technologies, major incentives to stop polluting, major incentives and regulations to clean up c

  • by Anonymous Coward on Monday November 13, 2017 @06:03PM (#55543685)

    6 years back I was working on a project for a polysilicon plant in the USA, it got shelved and the plant never built when the Chinese started flooding the market with cheap silicon. If this new development keeps up I wonder if the company that was going to build that plant will attempt to restart the project where it left off as most of the engineering design was already done.

  • by Anonymous Coward

    I'm pretty sure the surviving ones are able to produce within even more stringent regulations.

  • Mexico.

    Cheap labor, and if there are any environmental concerns, a coupe pesos in the right pockets makes it all good...

  • Minor deviations (Score:2, Interesting)

    by Anonymous Coward
    Lets not forget a couple things here.

    Firstly, the raw material needed to produce semiconductor grade polysilicon (and monocrystalline silicon) is just quartzite (aka silicon dioxide, aka sand), one of the most abundant materials in the earth's crust. So with that in mind, this isn't a situation like the rare-earth metals where china is literally sitting on the needed raw ore to produce the higher quality materials. We have the raw material in excess (as most countries do) and all we really need are the c
  • In the absence of artificial scarcity (diamonds) or collusion or import/export limits (supply), the market will establish a reasonable price level.

    I wouldn't worry.

    The problem is mostly for the profit margins of the suppliers and intermediaries.

    • by Anonymous Coward
      There is no hand, that is a childs Randian fallacy. Information asymmetry prevents cooperation which is the very thing required to actually generate the comparative advantage that results in true lowest costs.
    • The problem if you read the article is that China has tariffs on imported polysilicon so there is no "invisible hand" here. Worldwide polysilicon supply is not in danger. This is only a problem in China created by China.
  • by thinkwaitfast ( 4150389 ) on Monday November 13, 2017 @06:29PM (#55543885)
    is not a raw material.
  • how bout here?
  • Sounds like Perovskite solar cells [wikipedia.org] where invented right on time.
    • by ffkom ( 3519199 )
      I would really like to know why my above short, informative, very much on-topic and certainly not controversial posting was down-voted from score 2 to 1. Can you elaborate?
  • Grant Country, in central Washington, built their own damn along the Columbia River and offers the cheapest commercial power on the planet. This resulted in REC Semi [recsilicon.com]building a polysilicon factory there. REC has a Silane Gas plant (SiH4) in Butte, MT. Real short supply chain for the Semi industry. I see additional containerized Silane tanks going down I-90 to the port of Seattle with big warning signs, "NOT FOR TRANSPORT IN EUROTUNNEL." Make me fear my commune even more.
  • by Zorro ( 15797 ) on Monday November 13, 2017 @06:50PM (#55544033)

    No reason it couldn't be done in Silicon Valley.

    Only problem is California likes to shift its pollution to other countries and states so they can maintain the illusion of being green.

    We just ignore the fact that it REALLY runs on coal powered electricity from Utah and solar cells from China.

    • Re: (Score:2, Insightful)

      wtf has "virtue signalling" to do with this? And what is "virtue signalling" anyways? I currently understand it as "anything that goes contrary to my right-wing opinions and that I in fact feel insecure about" but maybe I'm wrong and there is more to it. Please enlighten me.
  • by Anonymous Coward

    Great news for thin film companies like First Solar (a US company). The cost of their panels is schedule to hit 20 to 25 cents in 2018 vs current wholesale prices of 32 cents. First solar's solar panel efficiency is 17% which is pretty good for thin film. More solar basic research should help bring down costs further and improve inefficiencies.

  • somehow make poly silicon from coal.
  • by Mspangler ( 770054 ) on Monday November 13, 2017 @08:36PM (#55544577)

    RECSilicon, Wacker, and Hemlock would be very pleased to sell the Chinese polysilicon. All the Chinese need to do is drop the 59% tariff they put on it.

    REC can make polysilicon for less than $11/kg. Take the tariff off and they could restart the other half the plant in 3 or4 months. Currently itâ(TM)s shut down due to oversupply outside of China, which is caused by the Chinese tariffs. 80% of the demand is in China, but less than 80% of the polysilicon production is in China.

    By the way, this particular trade war trade war was started by Obama.

    P.S. RECâ(TM)s quarterly report has more information on the trade war. You can browse the old ones to see how it developed over the years.

  • Ill bet we can find all the rare elements and more on the moon. Maybe even some things that will deliver us new tech. :)
    • Right, let's go to the moon so we can mine it. How do we get there though? Nuclear powered rockets!

      That doesn't sound like a great idea any more.

    • Where can I find out more about this business venture to import silicon from the moon?
      • Where can I find out more about this business venture to import silicon from the moon?

        I can tell you about it, but we want serious investors only so there's a $100K non-refundable investment required before I can give you details. And an NDA, of course.

        If you're thinking this is silly because 15% of the Earth's mass (28% of the crust) is silicon, I'll just point out that the Earth's silicon is of a lower grade. The best silicon is extra-terrestrial and the moon has some of the highest-grade silicon in the solar system, and it's also (obviously) the nearest and most accessible source. Given

    • The moon might have rare elements. Silicon is not a rare element as it is the most common element in the Earth's crust. The reason polysilicon is rare in China right now is that China imposed tariffs on imported polysilicon. The US and South Korea has plenty of polysilicon to sell to China; however, China made the tariff to import it from those countries high enough that it would not be profitable.
  • Who needs silicon when you can use proteins engineered from plants or cyanobacteria [nature.com] to generate electricity?
  • I stacked some silver used to produce polysilicon so when things gets bad I will support you guys with my stockpile.

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