CaliSolar to Build $600 Million Polysilicon Plant in Mississippi

CaliSolar Inc., a maker of polysilicon for solar cells, will build a factory in Mississippi after the state approved $75 million in incentives.

The $600 million plant in Lowndes County will produce 16,000 metric tons a year, Sunnyvale, California-based CaliSolar said in a statement Sept. 2. The company says its manufacturing process is less costly than other polysilicon providers.

With prices falling for the main material of solar cells, lower manufacturing costs may help CaliSolar compete against the biggest polysilicon maker Hemlock Semiconductor Corp., China’s GCL-Poly Energy Holdings Ltd. and other established companies, Mark Heller, an analyst at CLSA Asia-Pacific Markets in San Francisco, said today in an interview.

“We definitely expect prices to come down over the next few quarters as a lot of new capacity comes online in Asia,” Heller said.

CaliSolar is seeking to become “the lowest-cost producer” of solar silicon, Chief Executive Officer Sandra Beach Lin said in an interview. The company uses “feedstocks that cost a fraction of the conventional” raw silicon used by other manufacturers, according to its website. Lin wouldn’t provide additional information about its process.

The spot price of polysilicon has fallen more than 30 percent this year to $51 a kilogram, according to a data complied by Bloomberg New Energy Finance.

It may fall further. “We have lowered our polysilicon price forecast for 2012 to $35,” Heller said. “We’re seeing a stronger second half for polysilicon, but we’re going to see more oversupply next year.”

Mississippi approved on Sept. 2 a $59.5 million loan for equipment and buildings, an $11.25 million grant and $4.5 million for workforce training, Laura Hipp, communications director for Governor Haley Barbour, said in an e-mail. The plant is expected to create 951 full-time jobs.

CaliSolar also has a plant in Vaughan, Ontario.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net