The Chinese Solar Industry, it’s not an easy nut to crack. Over the past couple of years, it’s been up and down, vilified and honored, cutting edge and budget. However, like it or not, the Chinese solar industry is a force to be reckoned with in the world of renewable energy.
Just two days ago, China GCL-Poly Energy Holdings Ltd. Gained approval to implement a 310-MW project outside the city of Datong. This project represents the largest solar project ever in China. Not only is the scale breathtaking, but it also shows how China’s solar producers have been able to adapt to decreased sales in both Europe and the United States.
Sales have fallen for many Chinese manufacturers in recent history due to a couple of driving forces. First off, in the United States, public sentiment around Chinese solar goods (and really Chinese manufactured goods in general) has soured significantly. In the case of solar, many Chinese manufacturers were accused of what is known as ‘dumping’. Essentially, dumping is when one sells goods at prices too low for them to make any profit. The idea is that when you are dumping goods, you are losing money, however (hopefully) your competition is losing even more money. This practice, coupled with allegations of government subsidies for Chinese solar manufacturers, created a lethal practice that (effectively) did not allow domestic solar manufacturers to compete.
Was this actually the case? There are still investigations to determine how legitimate the claims of ‘dumping’ were with Chinese goods. However, at the very least the U.S. sentiment towards Chinese manufactured solar products is bleak to say the least.
With respect to Europe, China’s other dominant solar export partner; the credit crisis has crippled all large spending, especially in the areas of utilities. Usually for solar spending, the government is the primary purchaser of most of the goods. With austerity plans strangling governments for cash, this leaves little room for the Chinese solar goods. Whether or not this is a wise move for the Euro-zone is a topic for economists (and politically charged speculators), but what it means for China solar is less of an export market.
As a consequence, one would think the Chinese solar industry would be in a bit of a pickle. But, if you don’t have a market abroad, at least you can cater to home. The Chinese government has lobbed up a number of juicy solar contracts that are making domestic Chinese solar firm’s mouth water. I mentioned one example earlier, but other contracts are being presented with similar scopes.
Are these contracts because China wants to ‘go green?’ Perhaps. I am not an analyst of the inner workings of China’s policy crafting; however, a far more likely conclusion is that China is bolstering domestic projects to help ride the tide of poor international markets. By keeping its solar industry afloat, China is (once again) protecting them and priming them for the international market. This will keep China an energy leader in the future (which is undoubtedly renewably intensive).
But, is China’s activities something to be ashamed of? Renewables are clearly a fledgling industry (when compared to petrol). The relatively lack of traction is not due to poor business (minus Solyndra and some other exceptions) but rather by a highly efficient and cheap competition market. When we all know that the supply is going to run out on some other types of energy, is there really anything wrong with bolstering renewables?
After all, it is unlikely that renewables will beat out oil anytime soon. All we have to do is position them so that they are better (from an economic standpoint) than coal. Hopefully a mix of pollution control fees and renewable incentives will provide the necessary economic potion. We shall see.
To read more about the China domestic solar project: http://cleantechnica.com/2012/08/28/china-largest-solar-power-plant/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+IM-cleantechnica+%28CleanTechnica%29
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