Despite observing rapid growth in the production of solar cells, Chinese PV industry is facing huge potential risk owing to inadequate govt. support and the sluggish growth in overseas markets.

“China Energy Sector Analysis” – a recent market research report published by RNCOS – has found, “Production of solar cells in China has shown an impressive growth over the last few years. Within just two-three years (roughly during 2003-2005), the country’s share in solar cell production, relative to global production, rose to 8% (from 1.07%), next only to Japan & Europe.”

Growing further, solar cell production in China reached 370 MW (excluding the 200 MW output of Taiwan) in 2006. However, the photovoltaic (PV) market of China is still not able to match up the pace of development of photovoltaic industry. As a result of this, the Chinese PV industry is confronting huge potential risks.

The solar energy market overseas remains unsatisfactory in contrast to the vigorous expansion of production capacity. Currently, German market – that’s the world’s largest consumer of solar cells– is going down and other overseas markets are also growing slowly. As over 94% of the China’s solar cell products are exported, this slow rate of growth in foreign lands comes as another reason why Chinese PV industry is at risk.

Unlike developed countries, no specific subsidy policy is provided by China for its PV industry. It is still far behind the developed countries, for example Japan and Germany, in both scientific research system and infrastructure. Therefore, the Chinese govt. should offer incentives and subsidies for solar energy-based electricity generation since this will encourage demand in domestic PV market and also ensure the expansion of PV industry, advocated people from the industry in the CNEC International Solar Energy and Photovoltaic Conference held in Shanghai on May 10, 2007.

As per the RNCOS report on “China Energy Sector Analysis”, China has ambitious plans towards developing the renewable energy sources, however, coal is expected to remain the principal source of energy in near-term. But with advancement in technology, renewable sources will be able to compete with coal at pricing front.

For more information visit: http://www.rncos.com/Report/IM501.htm  
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