ErSol Solar Energy AG has signed a polysilicon contract with Wacker Chemie AG, the world’s second-largest provider of polysilicon for the semiconductor and photovoltaic industry. The contract begins in 2009 and will give ErSol an additional production output of approximately 100 MWp over six years.

“Our success in securing this material means that we can probably raise our expansion targets once again, said Claus Beneking, CEO of ErSol. ErSol plans to reach a nominal capacity of at least 220 MWp in the solar cells area as early as 2009.”

The deal has highlighted the extreme scarcity of polysilicon. There are approximately 13,000 to 15,000 tons of high-grade silicon available for 2006 and the demand from solar companies is twice the supply, Monsters & Critics reports.This imbalance is keeping prices high and has caused photovoltaic stocks to pull back.

“Wall Street analysts had be looking for 40 percent-plus growth and all of a sudden (sometimes it takes some time to sink in) they are looking at 15 percent to 20 percent growth because of the shortage, and stock got hit as a result,” said financial consultant J. Peter Lynch.

But many suppliers are already working toward expanding their capacity, and toward 2008 and forward, more capacity will be available.