Photovoltaic industry powering ahead

Last year, China overtook Japan as Asia's biggest solar market, and its growth is likely to continue. Some 3,000 megawatts of solar facilities will be installed in China this year, up from about 800 mW in 2010, Bloomberg New Energy Finance reported.

NPD Solarbuzz is even more optimistic, predicting that the country will add about 5,000 mW of solar capacity in 2012. With European governments considering further cuts in subsidies, China might even finish the year as the world's largest solar market, ahead of today's leaders, Germany and Italy.

Industry targets have been laid down and subsidies splashed out.

Workers assemble solar modules at a factory in Nantong, in East China's Jiangsu province. There are more than 2,000 companies in the country's photovoltaic industry. [Photo/China Daily]

The growth of the photovoltaic industry in China has been supported by a positive policy environment, which is now acting as a solid foundation for increased adoption of the photovoltaic technology.

Key incentive policies in China include both feed-in-tariff mechanism and government rebate programs.

FIT is a policy mechanism designed to accelerate investment in renewable energy technologies. It achieves this by offering long-term contracts to renewable energy producers, usually based on the cost of generation of each technology.

And the central government is continuing to work on new incentive schemes, such as the Renewable Portfolio Standard Management Measures and the Distributed Generation Management Measures, which could be rolled out during 2012, according to the research note by Ray Lian, senior analyst at Solarbuzz.

Since last year, China has started using FIT to guarantee the prices that utilities must pay solar power producers for their electricity. The program guarantees solar developers a payment of 1 yuan per kilowatt-hour, or 1.15 yuan per kWh in some cases depending on the timing and location of the project.

Ambitious targets

Meanwhile, the Golden Sun program was launched in 2009 to boost China's use of solar power. The country approved 1.7 gigawatts of Golden Sun projects this year, up from the 1 gW originally planned. The government is likely to add another 1.2 gW of projects under the program this year, in order to boost the domestic market, industry experts estimate.

The government also doubled surcharges on power sales to 0.008 yuan per kWh in order to subsidize renewable energy power generation.

The National Energy Administration has also decided to quadruple the country's 2015 solar energy target to 21 gW.

At the provincial level, many governments are accelerating solar installation projects. For example, Northwest China's Gansu province set the most ambitious target among all the regions, with 5,000 mW of solar capacity to be installed by 2015.

Boosted by the positive momentum, Yingli Solar said it plans to sell 2,500 mW to 2,600 mW of solar panels in 2012, including 900 mW in China. If the goal is met, China will become the company's largest market for the first time.

The company expects domestic sales to contribute 35 percent to revenues next year, up from 6 percent in 2010.

Solar panels makers are also building solar farms since panel prices plunged recently. Running such operations has become more profitable than manufacturing the equipment.