Is China On the Cusp of Becoming a Huge Solar-Panel Market?

As the world’s largest solar-panel producer for the last two years, China already is a major solar player. But now, some industry experts say, it’s expanding from being mainly a solar-panel supplier to also becoming a substantial customer.

“China, which already is important in production, is also going to be a large solar market,” Gerhard Stryi-Hipp, head of energy policy for the Fraunhofer-Institute for Solar Energy Systems, said last week at a roundtable to discuss trends in advance of the Intersolar North America conference next month. That’s an exciting prospect, as China — with its population of 1.3 billion — is soon expected to overtake the United States as the largest energy consumer in the world and already emits the most greenhouse gases.
New Chinese policies are spurring the transition, Stryi-Hipp says. The country in March approved a subsidy for building-mounted photovoltaic systems which could pay up to 20 Chinese yuan (about $2.93) per watt for systems larger than 50 kilowatts. For ground-mounted projects, the government is paying a feed-in tariff for the electricity generated, instead of a subsidy based on the projects’ capacity. It has settled on a price of 1.09 yuan (16 cents) per kilowatt-hour for a 10-megawatt ground-mounted project in Dunhuang, the first in a series of ground-mounted projects, says Jenny Chase, manager for New Energy Finance’s solar insight service. That’s better than it could have been — some companies actually bid at a loss for the project — but still far lower than the European feed-in tariffs, she says.

While New Energy Finance forecasts that the rooftop subsidy is only likely to drive 50 to 100 megawatts of solar installations, Chase says the provinces could end up driving additional demand by offering their own installation incentives. The Jiangsu province, for example, has announced plans to install 260 megawatts of solar through 2011.

On top of all this, the country has what Polly Shaw, director of external relations for Suntech Power, called the “most aggressive” renewable portfolio standard in the world.

Earth2Tech