10.21.2007

Who will Brighten China's Solar Energy Industry?

Shi Zhengrong, CEO of Suntech Power Co., Ltd, feels a twinge of embarrassment when asked when China's photovoltaic market will get on its feet. His sense of ease has further waned since China reinforced the Renewable Energy Law. Suntech Power (NYSE: STP), which listed on the New York Stock Exchange in December 2005, has seen its market capitalization exceed US$5 billion. The resulting great "wealth effect" has helped create a highly anticipated investment landslide in China's solar energy industry.

Yet not all influences have been positive. Observers note that the influx of capital has caused China's photovoltaic industry to shape itself into a poorly wound spool of thread, bulging in the middle and thin at both ends. Data shows that in 2005, the output of newly built cell production lines exceeded past totals of up to 145.7 MW (Megawatt), and the figure was expected to break 300 MW in 2006. Gross production capacity could have reached a record high of 1,449 MW, 70% of the world's total. But a scarcity of silicon materials is threatening further expansion. Material distillation technology is controlled by a few big businesses, and Germany and Japan, where the photovoltaic market is developing rapidly, are raising the entry threshold for Chinese solar energy enterprises. Added to this is where China's green technologies are being used: most of its photovoltaic products are sold to markets outside its borders, leaving the country with inefficient and polluting power sources.

Photovoltaic power generation comes with a higher price tag than conventional means, which makes good policy implementation all the more important. "In China, dozens of photovoltaic conferences are held on only one topic, calling for the government policies to start up the market in China," notes an exhausted Shi Zhengrong. Flecks of light are breaking through the gloom, however. Suntech, a maker of photovoltaic cells and solar electrical systems, for example, is integrating raw materials and market resources across the globe with its capital power, while other enterprises struggle. If China fails to start up the domestic photovoltaic market, Chinese companies will not be able to stand up to stiff international competition. The countries where the solar power industry is developing the fastest are also improving market standards and raising entry thresholds. China needs to learn how other nations are developing industry standards and key technologies.

Yet it is still widely believed that China will be the world's largest photovoltaic market and the largest photovoltaic producer. For Chinese enterprises, the battle for shares of the overseas markets is equally as important as the "fight on the home field".


This is the abstract of a Special Coverage on
http://www.cbfeature.com/.
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1 comment:

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