Chinese Solar Boom a Boon for American Polysilicon Producers

When Robert Bushman sold his California polysilicon recycling company in 2006, China controlled just 10 percent of global solar panel production. Four years later—after he'd bought the business back from a German firm—China's share had leaped to more than 50 percent, and it is still growing fast. "Most of our sales are in China today," he says.

Bushman's SolarSilicon Recycling Services is one of several U.S. suppliers of polysilicon—a key ingredient in solar photovoltaic panels—that is thriving off the Chinese solar manufacturing boom. Sales are "through the roof," reveals Bushman, who says he repurchased his company in part to cash in on surging demand for American-made solar silicon.

It's an increasingly unusual situation for U.S. solar firms. In other stages of the supply chain—wafers, cells and modules—China has lured American companies with its scores of low-wage workers and bevy of government subsidies.

But cheap business costs have limits in high-tech sectors like polysilicon production, where quality and innovation are coveted. And it's one area where the United States enjoys a trade surplus, amounting to $2.3 billion last year for the crucial material, according to new figures released by the Solar Energy Industries Association (SEIA) and GTM Research.

Over the past few decades, the United States has built a skilled labor force in making polysilicon—initially to create semiconductor wafers for computers and electronic products and now almost entirely for the solar industry. The country has also gained an edge in advanced equipment for making solar panel components. 

"In polysilicon and capital equipment, the U.S. has still done quite well," says Shayle Kann, managing director of solar research at GTM Research. "Those parts of the value chain are more capital intensive. They're more IP [intellectual property]-intensive, and they're more difficult to do. They are also less labor intensive, meaning that the advantage gained through lower labor costs has less of an impact."

Still, China has managed to become the world's No. 1 manufacturer of polysilicion producing one-third of the world's poly supply ahead of the United States, which accounts for 25 percent of global production. But most of China's silicon plants came online rapidly in recent years at the expense of quality and expertise, says Bushman. "Right now, the solar manufacturers would prefer to use... our recycled silicon before using the Chinese prime."

SolarSilicon Recycling collects leftover poly and other silicon scraps that solar firms trash after they cut wafers and cells into shapes. It tests, cleans, upgrades and packages the materials at its Los Angeles area facility, and ships the second-generation solar feedstock to customers in the United States, Germany, China and across Asia.

The idea first came to Bushman when he was working in the scrap metal business and noticed that one of his clients, Siemens Solar (now German solar giant SolarWorld), was tossing out its extra silicon at a time when supplies were limited. Bushman developed a silicon recycling process to use with Siemens, and in 1996 he opened SolarSilicon Recycling to offer his service to more clients.

The firm opened an office in Beijing in 2004 to facilitate sales to the Chinese solar panel market that was just taking off. The company changed hands several times—first to German wafer and cell manufacturer Ersol Solar Energy and then to German manufacturing giant Robert Bosch GmbH—before Bushman bought it back in 2010.

But even when the firm wasn't under his control Bushman says he kept in close contact with Chinese startups-turned-solar powerhouses—Trina, Suntech and Yingli Solar. Now, SolarSilicon Recycling is the world leader in silicon feedstock reprocessing for the solar industry, according to its website, though Bushman wouldn't disclose any financials.

To meet growing demand the company is expanding its operations into a Walmart-sized facility in Ventura, Calif., this year.