Can Explosive Chinese Solar Market Support Global Industry? 1

While solar markets continue to grow around the world, China has emerged as one of the fastest-growing proponents of the critical technology.

Market research firm Solarbuzz released its Asia Pacific Major PV Markets Quarterly for the fourth quarter of 2011, revealing that the continent’s solar market grew by a staggering 165 percent through all of last year. Over the course of 2011, Solarbuzz estimates that Asia added roughly 6 gigawatts of solar installations, with nearly half coming in the fourth quarter alone.

Even more impressively, however, nearly half of all added solar capacity came from China, with an estimated 2.9 gigawatts of solar power added. Nearly 60 percent of that amount – 1.7 gigawatts – came in the last three months of the year.

By comparison, Solarbuzz estimates that China added around 530 megawatts of solar capacity in 2010. That represents an astounding 547 percent increase from year to year. In 2010, China’s fourth quarter alone would have been good enough for the third-most solar installations, and the whole year would begin to push second-place Italy.

“The China [photovoltaic] market was reshaped in 2011 by the release of the national [feed-in tariff],” Ray Lian, analyst at NPD Solarbuzz, said in a statement.

The feed-in tariff was a policy implemented last year to help China take advantage of the glut of solar production capacity in the country. These powerful solar incentives, much like the policy that made Germany the world’s largest solar market, purchase power from solar installations at a premium rate, rewarding actual production as opposed to simply installation.

Feed-in tariffs are particularly powerful because the single policy can serve effectively to encourage residential solar installations as well as commercial solar power plants.

Bloomberg suggests that the rising demand this new policy has spurred in China could actually serve to relieve some of the pressure on solar panel manufacturers around the world. Overcapacity of solar panel production has led to a dramatic decline in equipment costs that has pushed some companies out of business, but some Chinese solar leaders see the growth in China continuing.

Zhengrong Shi and Jifan Gao, the chief executive officers of Suntech Power and Trina Solar, respectively, each predicted growth of more than 100 percent. While Bloomberg New Energy Finance estimates a somewhat lower 2.2 gigawatts of added capacity in China last year, Shi suggests the country could add as much as 4 gigawatts and Gao preducts 5 gigawatts. That level of demand could provide crucial support for a struggling solar sector.

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1 Comment

  1. We need to get serious about solar and wind so we can burn less coal and gas and export it which is the purpose it serves best

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