Historical Overview of the Solar Industry in China

From time to time we take you back to one of our past reports to present the state of an industry as it was viewed when it was written. This time, we look at the solar industry.

China is emerging as a future leader in the global solar PV industry. There is a huge gap between production and consumption and manufacture has predominantly been for export until the domestic market develops. The solar PV manufacturing industry is growing rapidly and in 2006 and 2007 there has been a spate of IPO’s for Chinese solar companies on the stock exchanges in Shanghai, Hong Kong, New York and London. One Chinese company, Suntech, is the third or fourth largest cell producer in the world. Chinese module production increased from 134 MW in 2005 to 370 MW in 2006 but in that year installed capacity reached only 70 MW, due to a lack of fiscal incentives to stimulate the domestic market. Many would argue that solar energy will be constrained for some years to come by the relative ease of accessing coal, but consensus of opinion is that China will soon become a major market.

New Chinese policies are spurring the development of solar PV. In March 2009, a subsidy was approved for building-mounted  PV systems which would pay up to 20 yuan per watt for systems of more than 50 KW. For ground-mounted projects, the government is paying a feed-in tariff. For a 10 MW project in Dunhuang, the first in a series of planned ground-mounted projects; this has been agreed at 1.09 yuan per kilowatt-hour. The incentives on building mounted installations are expected to drive up to 100 MW of additional capacity, but the Chinese provincial authorities are expected to develop further incentives; Jiangsu province has led the way with plans announced to install 400 MW of solar up to 2011. This is likely to include 260 MW of new roof capacity, 10 MW of BIPV and 130 MW of ground-mounted capacity.

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