Solar demand boosts silicon stocks

Silicon producer Simcoa Operations is reaping the benefits of the growing popularity of solar panels, which is driving a boom in the demand of the major component used in photovoltaic cells.

Silicon is used in solar panels to convert the sun’s energy into electricity.

‘‘It’s this soaring demand for silicon by the solar panel industry that is driving multi-million-dollar expansions at Simcoa Operations, Australia’s only silicon producer,’’ according to Simcoa general manager of marketing David Miles in the latest Kemerton Industrial Park newsletter.

To meet the growing demand, the Kemerton-based company is constructing a $100 million third furnace at its Marriott Road-based site, with plans in the pipeline for a fourth furnace.

The first stage of the project will enable Simcoa to manufacture 16,500 tonnes more of silicon each year.

In the newsletter, Mr Miles said while the silicon produced by Simcoa was not pure enough to be used in the manufacture of solar panels, the product was sold to various companies who refined it to extremely high purity.

Those companies then sold it off to companies that used i t in photovoltaic applications.

According Solar Shop Australia, the company has sold more than 350 solar panels since its Bunbury store opened in August.

Solar Shop regional WA sales manager Lewis Sheppard said the level of interest in the South West for the power-saving devices had exceeded demand.

‘‘It’s people that have come in to us seeking information rather than us doing the hard-sell approach,’’ he said.

Mr Sheppard said the Federal Government’s announcement in December that the solar credits multiplier would be reduced a year earlier than expected had further fuelled demand.

The rebate will be reduced from July 1 next year and the scheme is set to be phased out completely by 2014, with incremental reductions taking place over the coming four years.