External cost of photovoltaic oriented silicon production: A case in China

The rapidly increasing demand for silicon panels has resulted in severe pollution from its manufacture in the underdeveloped regions of China, where environmental control usually concedes to economic development. The study aimed to estimate the external costs of silicon production to inform policy on the sustainable exploitation of solar energy. Specifically, the study estimated the cost of health damage and agricultural loss resulting from the pollution of silicon production. The data was collected from a silicon industrial zone in Southwest China. The cost of agricultural loss was estimated using a production function method, while the cost of health damage was estimated using dose-response functions, in which the air pollutant concentration was estimated based on a Gaussian dispersion model. The results show that the annual external cost of agricultural loss is CNY 0.76-4.13 million and that of health damage is CNY 26.53-44.63 million, or a total external cost is CNY 27.29-48.76 million. The average external cost is CNY 447.35 (CNY 321.1-473.82) per ton of metallurgical silicon. This information has implication for making policies on the control of pollution and the sustainable development of solar energy industry.