"The spot price of silicon materials in China will drop to US$50/kg within 2009," said Dylen Liu of JL McGregor & Company, a research firm in China.

He delivered a speech on the Chinese solar cell industry at Solar Cell Market Seminar 2009 hosted by Nikkei Market Access with help from Nikkei Microdevices in Japan.

In his speech, Liu introduced recent drops in the spot price of polycrystalline silicon materials in China. The price was more than US$350/kg until October 2008 but dropped by half in November 2008, being hit by the financial crisis and other issues. And it continued to fall to less than US$80/kg in April 2009.

Liu forecast that the spot price will further decline to US$50/kg within 2009. And he calculated the manufacturing cost of a crystalline silicon solar cell module when the price of polycrystalline silicon materials is US$50/kg. The cost will be US$1.1 to 1.2/W at vertically integrated solar cell manufacturers in China, he said.

On the other hand, the manufacturing cost of a thin-film silicon solar cell module will be US$1 to 2 per watt at average Chinese solar cell manufacturers, Liu said. The manufacturing costs of the two types of solar cell modules are getting closer to each other due to the decreasing polycrystalline silicon material price.

At First Solar Inc, a US solar cell manufacturer that is a leader in cost reduction, the manufacturing cost of the CdTe type solar cell module was US$0.98/W as of the fourth quarter of 2008.