It's all too easy to overlook the complexity of the solar pv industry and talk about it collectively. The manufacturing end of the Solar PV industry in particular has several levels, with generally speaking, the highest margins at the top. Those levels are;

i) Those that make polysilicon

ii) Those that cut wafers from the said silicon

iii) Those that make solar cells from the wafers

iv) Those that make solar modules from the solar cells

(Here's where I got the photo from by the way). Followers of this blog and of the solar industry in general will be well aware of the polysilicon supply crunch which is largely responsible for the non-fall in prices, so often predicted in recent years from increased production.

Well LDK Solar, a manufacturer of silicon wafers, has just come up with its own drastic answer to the polysilicon shortage, making it themselves. LDK expects to start production at 6,000 metric tons in the third quarter of 2008, rising to 15,000 tons in 2009 - a hell of a lot.

Meanwhile, China Sunergy, Chinese solar cell firm based in Nanjing, is so desperate for wafers that they are buying them from Taiwan. I say desperate because I suspect mainland Chinese officials would hate their high-tech industries to be seen to be dependent on Taiwan, for them a renegade province that should be under PRC control. If you want to know more about the Taiwanese solar industry, take a look at this excellent piece here.

The hard question though is how long will the silicon shortage last?

A few years ago, the optimists said 2008, today they say 2010. I'm going to stick my neck out and guess that it will be even longer than that - 2012. A lot more capacity needs to be created at the top end of the manufacturing chain and I don't see that - yet.