![REC Silicon plans to continue with solar-grade polysilicon production at Moses Lake in the US, while shutting down electronic-grade polysilicon manufacturing at Butte. (Illustrative Photo; Photo Credit: Bjoern Wylezich/Shutterstock.com)](http://media.assettype.com/taiyangnews%2Fimport%2Fwp-content%2Fuploads%2F2024%2F02%2FPresentation1-10.jpg?w=480&auto=format%2Ccompress&fit=max)
The US subsidiary of Norwegian polysilicon manufacturer REC Silicon will discontinue its polysilicon production capacity at its Butte, Montana location citing high electricity costs. It would, however, continue to produce silicon gases business at the Butte location catering to the growing solar PV market demand.
The management blamed the 'regional structural imbalance in supply and demand for electricity'. Discontinuing the polysilicon production at Butte will significantly reduce annual energy consumption and operating costs, it added.
It called it part of its strategy to ensure long-term profitable operations.
The subsidiary REC Advanced Silicon Materials LLC produces electronic-grade polysilicon and silane gas at the Butte facility. Its other US fab at Moses Lake in Washington produces solar-grade polysilicon. Both the locations combined have an annual production capacity of over 20,000 metric tons (MT) polysilicon.
"We did everything in our power to return profitability to the polysilicon business in Butte, however, forecasts for sustained high electricity costs that are outside of our control necessitated this decision," said REC CEO Kurt Levens.
Before taking the decision to shutter polysilicon production at Butte, the management said it factored in the short and mid-term increased electricity pricing in the region. It found that high electricity prices are not expected to abate and will not allow for profitable operations in the polysilicon business line in the long-term even if it increased sales prices or opted for other mitigative measures such as electricity hedging, and optimized production.
According to REC, "These efforts minimized the losses in the short-term, however, the decision taken is primarily about the mid to long-term viability of a very power-intensive polysilicon process located in a high electricity cost region, particularly relative to alternative manufacturers and regions."
The company will continue to produce polysilicon at the Butte fab for another 6 months to 9 months to fulfil supply obligations. Post that, it will reduce the workforce associated with the work at the factory.
Levens added, "Most importantly, we will have full focus on Butte's globally leading silicon gases business. We will work towards executing more investment and product opportunities available due to that leading position as well as the tailwinds the Chips, IRA and Infrastructure Acts are providing."
REC's Moses Lake fab restarted production in Q4/2023 after being idle for 5 years and is scheduled to enter full production in Q4/2024. Initial delivery of high-purity granular polysilicon is due in Q1/2024. It was made possible after its majority stakeholder Hanwha Solutions signed a 10-year take-or pay offtake agreement for 100% output.
It produced 182 MT total polysilicon and 832 MT silane gas in Q4/2024. Its EBITDA loss of -$31.2 million widened from -$17.8 million in the previous quarter. The company is now looking forward to promising times for its business with the uptick in domestic solar manufacturing industry in the US.
Levens added, "The financial results for the quarter were weak, however, the company continues to work towards our first shipments of our high purity granular polysilicon from Moses Lake and completing the projects in Butte that give us capacity leverage and places us in a position to capture increased silicon gas opportunities that come with the anticipated improvement in the semiconductor market, the advancement of volume production of silicon anode materials and eventually IRA driven Solar PV Cell production" said Kurt Levens, CEO.