A YEAR AGO, REFINED silicon for solar cells cost 450 bucks a kilo on the spot market. You can have it today for closer to 100 and if you wait a month it may be cheaper still. Thanks to the workings of international capitalism, the 90% margins available in last year's market spurred silicon-factory expansions around the planet. But the new supply arrived just as end-market demand for solar panels got eclipsed by faltering government incentives, lower oil prices and the world financial freeze. -Skip- As practiced silicon refiners like Hemlock turn on new production, supply may outstrip demand by 50% this year and 75% next year. Latecomers like LDK Solar (LDK) plan big refineries, although LDK's project just suffered storm damage. In the next five years, producers plan to double capacity from about 100,000 tons this year to 200,000 tons. That will help make solar power as cheap as the fossil-fueled power grid, and it's impossible to overstate how wonderfully that will help stem global warming. But barring a price-fixing conspiracy like some memory chip makers periodically attempt, the solar industry's margins may not be so hot.
-Skip-
As practiced silicon refiners like Hemlock turn on new production, supply may outstrip demand by 50% this year and 75% next year. Latecomers like LDK Solar (LDK) plan big refineries, although LDK's project just suffered storm damage. In the next five years, producers plan to double capacity from about 100,000 tons this year to 200,000 tons. That will help make solar power as cheap as the fossil-fueled power grid, and it's impossible to overstate how wonderfully that will help stem global warming. But barring a price-fixing conspiracy like some memory chip makers periodically attempt, the solar industry's margins may not be so hot.
