Norway's Hydro, an oil and gas firm, and Belgium's Umicore, a materials technology group, this week announced they will jointly open a new subsidiary called HyCore, to produce silicon for use in solar energy technology.

"The demand for high-purity silicon has increased significantly in recent years and we expect the market to continue to grow in the years to come. Consequently we have great expectations regarding our investment," Einar Glomnes the head of Hydro's solar division, said via an Umicore statement.

HyCore will be headquartered in Porsgrunn, Norway, and it won't be Norway's first solar silicon manufacturer. Renewable Energy Corp., one of the world's top silicon dealers, is also a Norwegian company.

"Metallurgical silicon is found in abundance, but the demand for solar-grade purity has risen substantially, in line with the growth of the photovoltaics industry," the Umicore statement explained. "Economical limitations of the traditional conversion technology have led to a shortage of solar-grade silicon, which has spurred the development of new technologies."

"HyCore will utilize proprietary technology that Hydro and Umicore have developed for the conversion of metallurgical silicon to solar-grade silicon," the statement said.

The highly refined silicon is also expected to remain in short supply until at least 2008 because of skyrocketing consumer demand.

"Probably the demand (from solar companies for silicon) is twice the current supply," Erik Thorsen, Renewable Energy Corp.'s president and chief executive officer, told UPI.

Thorsen said there is no immediate way to ramp up high-grade silicon purification, because "it takes two to three years to build a plant like that."

"HyCore's first step will be to construct a pilot plant ... which will be completed in 2008. (It) will have an annual capacity of around 20 tons of solar-grade silicon," the statement said.

"Provided the pilot program proves successful, the intention is to construct a larger facility ... with the capacity to produce industrial-scale volumes by 2010."

A spokesman for Hydro did not immediately respond to a requests for comment.

Also this week, the European Photovoltaic Industry Association warned that although feed-in tariff programs are proven to nurture solar energy development, the EU's harmonization efforts might hinder solar feed-in progress.

"The EPIA debate stressed that correctly designed feed-in tariffs are needed to promote PV electricity, but warned that EU harmonization could give negative effects," the statement from the Brussels-based organization said.

The organization on Wednesday held a roundtable debate "on the future of support mechanisms for renewable energies and in particular solar photovoltaic electricity."

Feed-in tariffs are the premiums electric companies pay their renewable energy-producing customers for the extra energy they "feed" onto the grid. Generally, this is the retail price that customers pay for fossil fuel-driven electricity, and not the wholesale price -- a difference of several cents per kilowatt hour.

This way, consumers see a return on their investment sooner, a measure which has been shown in many markets to encourage the demand for and development of solar energy, most notably in Germany.

"Feed-in tariffs are the cheapest and most effective option to promote solar photovoltaic electricity," Claude Turmes, the vice-president of the European Parliament, said in the debate, according to the EPIA. "Alternatives such as green certificates give no guarantee to investors, as a well designed feed-in scheme does."

The debaters concluded this about the EU's harmonization's effect on solar: "Countries (other than Germany) such as France, Spain, Italy (and) Greece have already chosen to promote solar PV electricity through feed-in tariff schemes. However, administrative barriers in terms of paperwork or request of permits considerably slow down the process in several countries and increase the price of installed systems compared to Germany."

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