Polysilicon prices have dropped by 50%. Industry calls for adjustments in energy structure.

Information from a source on Monday from the PV industry says that since October, China's polysilicon price has shown a big adjustment. In the recent 2 weeks, the price per kilogram is only about 1000 RMB to 1500 RMB (about 147 USD to 220 USD). Comparing to the peak price of 400 USD to 500 USD per kilogram, the price has fallen by more then half.

The source provided the information while attending the First China-US Green Technology Forum. He points out that because of the outbreak of the financial crisis and the big drop in crude oil price, quite some PV related projects are affected by the banks credit tightening and low liquidity and delayed. The result is that in the short term, there are no more shortage of raw materials in the market and thus the price of polysilicon took a great fall.

As more polysilicon projects goes into production globally this year, the supply source enlarges which speeds up the balancing of demand and supply says the source.

Canadian Solar Inc. (CSI) chairman, president & chief executive officer 瞿晓铧 who was also present at the forum confirms that polysilicon price has seen a retrace. He said that in June-July period, polysilicon price reached the peak of 400 USD to 500 USD per kilogram. At that time, CSI completely stopped all purchasing from the spot market and took measures to extract upgraded metallurgical grade (UMG) silicon and through long term partnership and other methods to get raw materials.

But Dow Corning greater China president Thomas H. Cook (柯同德) said that altough some polysilicon spot contract prices have started to fall, overall the polysilicon market still has not shown excess production capacity.

On the effects of the financial crisis and the fall in crude oil price, 瞿晓铧 thinks that the effects are only temporary. He thinks that in the short term there may be psychological effects on the PV industry but in the long term the development trend will not change.

瞿晓铧 thinks that a mature policy maker should take the current opportunity of low oil price to adjust the country's energy structure. It should include 2 things. One is to increase the energy in dependency and energy safety. The next is to adjust the ratio between crude oil energy and new energy. Under the condition of high oil price, such adjustments will be hard to push because of high costs. But currently it provides a good opportunity and can better achieve a more stabilized adjustment.

LDK chairman and chief executive officer 彭小峰 said recently that the financial crsisi has brought great opportunities for the company's development. The reason being that the financial crisis has caused raw materials prices to drop. The raw materials cost for the company can be expected to drop 40% to 50%. 彭小峰 said that at such situations, the costs for PV electricity generation and traditional electricity generation can catch up. On the condition that electricity prices to keep on increasing and costs for PV to keep dropping, it will speed up the penetration of PV products. There is the possibility that the previous estimated price of $1 per Watt in 2012 can be brought forward by 2 years.