Because of the rising costs of petroleum and natural gas and the increasing emissions from greenhouse gases, renewable energy sources have emerged as viable energy sources—especially solar power.

Although solar power is still about twice as expensive in most areas of the United States, solar panel producers are expected to lower prices by about 40% over the next few years, primarily due to the aggressive tactics of China to dramatically build its capacity of solar power manufacturing. In fact, in 2006, China became the world’s third largest producer of solar panels—beating out the United States—and now only trails the countries of  Germany and Japan.

The key ingredient of solar power is polysilicon, which helps solar panels convert sunlight into electricity. Also called polycrystalline silicon or poly-Si, it is composed of many small silicon (Si) crystals. Sand contains silica (with over half of the Earth’s crust composed of silica). To make polysilicon, silica is converted to pure silicon, which is then refined to form crystals. The crystals are sliced into wafers and used to form the silicon cells for solar panels. As of 2006, about 30% of the world’s supply of polysilicon is used to produce solar power panels.

Demand for polysilicon is great for the solar power industry. According to the Solar Energy Industries Association, the growth rate of the solar energy industry has been nearly 40% per year over the past five years (2002 to 2006). In 2006, the industry is estimated to be valued at $15 billion worldwide.

Because of that demand, prices are rising dramatically. However, the solar energy industry has been limited in the last five years due to limited amounts of silicon and polysilicon being produced.

On the other hand, manufacturers of polysilicon are gearing up to produce more of it. In fact, Hemlock Semiconductor, the world’s top supplier of polysilicon, is working to double its capacity by 2008 with a nearly billion dollar expansion of its Michigan plant. Before the year 2010, the plant plans to have capacity to manufacture 19,000 metric tons of polysilicon annually.

The major manufacturers of polysilicon include Hemlock Semiconductor (Hemlock, Michigan, U.S.A.), Wacker Chemie (Munich, Germany), REC (Hovik, Norway), Tokuyama (Tokyo, Japan), MEMC (St. Peters, Missouri, U.S.A.) , Mitsubishi (Japan and U.S.A.) , and Sumitomo-Titanium (Hyogo, Japan).

In light of rising oil prices and the need for more reliable and environmentally friendly fuel sources, a growing demand for solar power is occurring in the United States and other countries around the world. The demand is creating a dramatically growing solar manufacturing industry.

Already, areas with plentiful sunshine are finding solar power costs running similar to traditional energy sources. Solar power may eventually become a major power sources as solar panel prices come down. Solar power companies in the United States, Europe, China, and Japan are increasing their capacity for making solar panels.

If these solar power companies can keep up with the demand, their future should be bright. With solar power only providing less than one percent of the world’s electricity, there is still a long way to go.

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