NEW YORK (MarketWatch) -- It seems as if now would be the time to shine for solar panel makers, but a lack of a key raw material will cloud the picture for many over the next couple of years.
With concerns about high fossil fuel prices and greenhouse emissions driving demand for renewable, cleaner energy sources, solar stocks have been, well, hot. But while solar companies are sold out of current capacity, efforts to try to expand to meet rising demand are being thwarted by a shortage of silicon.
"The polysilicon supply to solar (photovoltaic) manufacturers has been tight for the better part of two years and is anticipated to be a growing issue as the PV industry pushes forward on its aggressive expansion plans," Merriman Curhan Ford & Co. analyst Brion Tanous said. Supply constraints have limited production by some manufacturers, and high prices are hurting profit margins.
Solar manufacturers must compete with computer-chip companies for highly pure silicon, which sells for $42 to $60 per kilogram via long-term contracts and which a tight supply has driven up to more than $150 per kg on short-term contracts...read more
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