The cost of power
Polysilicon has sold for as little as $50 per kilogram in recent months, part of an 89 percent drop in price in the past few years. The building block of silicon solar cells has dropped so much in price that the venerable solar technology actually increased its share of the solar market over thin films in 2010, now accounting for nearly 90 percent of the photovoltaic market at a cost of roughly $1.20 per watt, not including installation. Solyndra simply couldn't compete at a cost of more than $3 per watt, according to papers the company filed with the U.S. Securities and Exchange Commission.
U.S. companies are largely to blame. GT Advanced Technologies, Hemlock Semiconductor and REC Solar all produce vast quantities of solar-grade silicon and other ingredients for PV devices. That has led to the U.S. being a net exporter of solar-energy products, nearly $2 billion worth in 2010 (including a positive trade balance with China in solar). "It's refined rock but it's still very much a high-tech product," says Frank van Mierlo, co-founder and CEO of 1366 Technologies. "Even the Chinese, when they build it, they build it with American technology."
And the U.S. may yet do more: 1366 is working on a machine roughly the size of a dishwasher that will convert molten pure silicon directly into wafers for photovoltaics, rather than employing the process of sawing wafers from purified silicon logs as is commonly done today. "We [can] do in one step and 25 seconds what today takes the better part of a week and multiple steps," van Mierlo notes. The 1366 process of directly growing wafers also ends up doubling the effective use of a given piece of silicon.
Of course, China helped Solyndra's demise as well, pumping money into silicon solar panel–makers such as Suntech and Trina Solar. In 2010 alone Trina produced one gigawatt worth of silicon solar panels. Much like U.S. companies: "the goal is to achieve grid parity," Trina spokesman Jeffrey Fan said during a visit to the company's Beijing offices in 2010. "This industry is very policy driven," whether that policy be rich feed-in tariffs in Germany or subsidies for manufacturers in China.
In essence, China has been loaning Chinese solar module manufacturers in that country money at low-interest rates for both production and installation, even when installation takes place in other countries such as Germany, which makes Chinese products unbeatably cheap when paired with Chinese advantages in labor and logistics costs. "The cost of financing for U.S. and [European Union] production accounts for one third of the cost per kilowatt-hour," Fthenakis notes. In other words, easy financing makes China-made solar cells much cheaper than those from manufacturers who must pay interest on any money borrowed to build factories or install modules. "I would have more confidence in the U.S. solar industry if we take China to the [World Trade Organization] and slow down the unfair competition," Fthenakis adds.
In fact, U.S. Trade Representative Ron Kirk filed a complaint to the World Trade Organization on October 7 concerning roughly 200 subsidies that China has failed to report over the last five years, including to solar companies. According to Bloomberg New Energy Finance, the Chinese government in various forms has offered to loan solar companies like JA Solar, LDK Solar and Yingli Solar more than $30 billion in the past few years, although only a fraction of that money has actually been borrowed. "It is a challenge for companies [like Solyndra] to compete with that," Solyndra's Miller adds, because the U.S. does not provide as much financial support for its solar companies.