China's Solar Plans Could Stall Without Installers

China is on its way to becoming a solar power – with financial incentives coming from every corner of the country – but a lack of experienced project developers and equipment installers may cast a shadow over the growing industry.

The country is already a powerhouse when it comes to solar manufacturing, with several large solar cell and module manufacturers located in the country. But unlike the U.S. and Europe, China hasn’t had much experience developing and installing solar projects. For instance, in 2008 the country had an installed base of solar power of only 50 megawatts.
“In the mid term, installers could be the key factor preventing China from expanding its global market share in annual solar installations at such a rapid rate as Spain did from 2005 to 2008,” said Charles Yonts, an analyst with the Hong Kong-based brokerage, analysis and advisory services firm CLSA. “But I don’t think lack of installers will prevent China from reaching my 1500 (megawatt) 2011 target and then some.”

The Chinese government is targeting solar power capacity of between 10 and 20 gigawatts by 2020 and is ratcheting up funding to achieve it.

On July 21, China’s Ministry of Finance, Ministry of Science and Technology, and National Energy Administration officially announced details of the country’s “Golden Sun” program. Under this program the Ministry of Finance will subsidize half of the total construction costs of an on-grid solar power plant, including transmission expenses. The ministry of finance will also pay for up to 70% of off-grid installations.

Its sweeping subsidy program is also not limited to one or two provinces around the country. Instead, China is offering the subsidies for up to 20 megawatts of demonstration projects in each of China’s 22 provinces, and in its five autonomous regions.

Given those targets, analysts expect that China could develop more than 500 megawatts of solar power over the next two to three years.

The lack of installation expertise could represent an opportunity for international companies, even if Chinese solar companies have an advantage in bidding for new projects because of their ties to local government.

Wall Street Journal (through Google News)