China: Rethinking PV on a global scale

The fourth CIPV Expo, newly part of Clean Energy Expo China, which covers solar, wind, biofuels, e-mobility and smart grids, was held last week from February 23 to 25. While the unveiling of Germany’s new feed-in tariff (FIT) plans dominated discussions, fighting talk could be heard about the SolarWorld trade case, and details emerged over the most successful way forward for China’s photovoltaics industry which, of course, included further cost-cutting.

Further cost reduction

The Solar PV Power Forum, held on February 24, provided some particular insights into the future direction of the Chinese photovoltaics industry, in addition to analyzing the impact of the German cutbacks and photovoltaic trade disputes on Chinese manufacturers.

According to an announcement by the Ministry of Industry and Information Technology during the show, China will further increase photovoltaic panel production. The goal is to reduce the cost of solar power to RMB 0.8 (US$0.12) per kilowatt-hour (/kWh) by 2015, and RMB 0.6/kWh by 2020. The Chinese government is also promoting the industry’s consolidation by requiring a production scale for polysilicon suppliers of 50,000 tons, and an annual panel production of five gigawatts (GW) by 2015.

According to Wu Zhonghu of the China Energy Research Society, quoted in Friday’s edition of China Daily, "It is time for integration … The PV industry has a prosperous future, but at present, there are many obstacles, including high costs, shrinking overseas markets and a lack of related laws and regulations to supervise the industry."

Buffeted

With the announcement of drastic cuts in Germany, it seems Chinese manufacturers are being buffeted from both East and West. From the East, across the Pacific, by a trade dispute ever more likely to lead to punitive tariffs on Chinese crystalline silicon cells and panels. And now from the West – up until now the cornerstone market for photovoltaics suppliers – following the German erosion of demand dictated by the just-announced cuts.

German speakers at the conference, including Sven-Uwe Müller, program director for Renewable Energy China at the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, and Petra Leue-Bahns, CEO of the international photovoltaics developer, Ecolutions, painted a grim picture of the impact of German cuts on the photovoltaic FIT.

Müller was cautiously optimistic about future prospects, whereas Leue-Bahns, whose company is particularly active in large-scale projects, criticized the complete removal of large-scale solar farms above 10 megawatts from the program. In the words of Leue-Bahns, "utility-scale PV is now dead in Germany."

Overall she regarded the German step as heralding the end of Europe as an attractive market. Instead, she sees the future focus of the photovoltaics industry in China and markets with plenty of irradiation, especially Africa. China’s close ties to many African countries could put China in an excellent position as this continent seizes the potential of its abundant sunshine and reduced photovoltaics costs.

New world view

So on the global scale a completely new world view seems called for. And domestically, CIPV Expo revealed a push among China’s solar elites to promote residential solar, in order to endorse one of the core benefits of photovoltaics – namely power generation where power is needed and consumed. This is the promise of residential photovoltaics and, like last year’s CIPV Expo, building-integrated photovoltaics (BIPV) was one of the highlights of this show.

Whether building-applied photovoltaics (BAPV) or BIPV, there was a sense that more needed to be done to promote the benefits of such installations, and that existing government programs to promote distributed solar power were not yet sufficiently utilized by the market. As Jianguang Su, director, Asia Region, Global Procurement, of Trina Solar pointed out, these incentives include tax breaks, hefty government subsidies of 50 percent of the upfront system cost, and generous loan programs covering 70 percent of the investment.

Powerful PV

As traditional markets in Europe and North America cut their support or close their doors to Chinese imports, China will not let its powerful photovoltaics industry hit the wall. CIPV Expo made this clear and we can expect more measures from the Chinese government to boost large-scale solar in western China and get roof-top photovoltaics off the ground in its huge urban areas on the eastern seaboard.

As Trina’s Su observed, China has five billion square meters of rooftop space and south-facing facades available for photovoltaics. If only 20 percent of this were mobilized for photovoltaics, this would amount to 100 GW of installed power. If China’s ubiquitous adoption of rooftop solar thermal is any guide, this sector might just be the next great leap forward in Chinese solar.

Edited by Becky Stuart.