Innovator: Solar Grade Silicon LLC

Headquarters: Moses Lake, Wash.

Employees: 170

Business: Manufacturer of silicon feedstock for the solar power industry

Interviewee: Tor Hartmann, CEO

The solar industry has been experiencing double-digit annual growth rates, making it one of the big success stories of the last decade. In the last three years alone, solar photovoltaic (PV) manufacturers have nearly tripled module production output from 353 MW in 2001 to approximately 1,000 MW (1 GW) in 2004.  That’s enough new PV modules shipped last year to power around 300,000 American homes.

The astounding 40 percent-plus annual growth rate, however, has caused some pain for the fledgling solar industry. The sector witnessed shortages on both ends of the value chain last year:  in silicon feedstock (the material required to build solar cells) and in PV module shipments to end-use customers. Momentarily reversing a long-term trend toward lower pricing, the sector also saw prices increase for both silicon feedstock and modules.

In the past the solar industry was able to grow and develop based on the scrap materials of the electronics (silicon chip) industry. But the recipe has proven unreliable. As the electronics sector recovers and the requirements of the PV industry expand, there’s been an increasing need for a dedicated supply of silicon.

According to Tor Hartmann, CEO of Solar Grade Silicon, the supply problem is exactly what’s fueling growth of his Moses Lake-based company. Solar Grade Silicon is currently manufacturing approximately 2,300 metric tons of solar grade silicon annually - enough to supply approximately one-fifth of the solar industry’s silicon feedstock requirements in 2004. Shipping 100 percent of its product to solar-related companies, it’s currently the only feedstock manufacturer dedicated to the industry. Hartmann said the singular focus enables the company to provide a targeted product at a lower cost.

It wasn’t always that way. The company’s manufacturing facility was set up by Union Carbide in 1984 to produce polysilicon for the semiconductor industry. In 1990, the plant was sold to Komatsu Ltd. and a new operating company, Advanced Silicon Materials Inc., was formed. During that time, only about 10 percent of Moses Lake’s silicon output was sold to the solar industry.

In late 2001, with falling demand from the global semiconductor industry and shifting corporate priorities, the decision was made to shut down the Moses Lake facility. REC, an integrated solar company based in Norway, however, heard about the pending closure and a new joint venture, Solar Grade Silicon LLC, was born between REC and Advanced Silicon Materials. REC initially held a 50 percent stake in the venture. It now holds 75 percent.

In essence, Solar Grade Silicon takes metallurgical grade silicon (about 97 percent pure) and refines it to 99.999999% pure silicon useable for PV ingot, wafer, and cell manufacturing. 

Solar Grade Silicon now has plans to more than double manufacturing output, bringing a potential 3,000 metric tons of additional solar grade silicon production capacity online. The company plans to base its new manufacturing facility on an advanced fluid bed reactor design, which would enable production of granular, or beaded, silicon. The company already has a demonstration production facility up and running and patents pending on the new technology, but it will take approximately two to three years to get a new production facility fully operational.

Hartmann explained that silicon feedstock manufacturing is responsible for up to half the energy needs of producing a solar module. The Northwest has proven an ideal home for such power-intensive manufacturing, he added.

In fact, when the plant was originally set up by Union Carbide in the ‘80s, Grant County had the lowest electricity costs in the country. Today, Solar Grade Silicon is the largest industrial user of electricity in the Grant County Public Utilities District, where all of the county’s locally produced electricity comes from two Columbia River dams.

Silicon shortages, while a serious problem for the solar industry, are likely to be short lived as innovators like Solar Grade Silicon ramp up production to meet demand.  

In late 2004, Elkem, one of the world's leading suppliers of industrial metals and materials, provided its stamp of approval by acquiring a 23 percent stake in Solar Grade Silicon’s parent company REC. REC not only owns 75 percent of Solar Grade Silicon with an option to acquire 100 percent, but it also has holdings in ScanWafer (a multi-crystalline wafer manufacturer), ScanCell, and ScanModule. Elkem’s investment and minority ownership in REC shows just how mainstream the solar industry is becoming. 

With brand-name behemoths like Sharp Electronics (the world’s leading producer of PV modules) projecting manufacturing output of 450 MW in 2005, Sanyo announcing plans to reach 1,000 MW by 2010, and GE targeting $1 billion in sales in its solar division within 10 years, the solar industry will increasingly rely on companies like Solar Grade Silicon for a dedicated supply of silicon. And with the Northwest’s low-cost, hydro-based electricity supply, a true renewables-powered solar revolution may be blooming under increasingly bright Northwest skies.