China's Solar Footprint Set to Explode; Creates Investment Opportunity, Says GTM Research
Oct 8, 2009 16:18
Nikkei Electronics Asia
Demand for solar panels inside China could explode over the next three years, presenting an opportunity for investors and select international partners, according to a report from GTM Research, the market research arm of Greentech Media.
China has a cumulative installed base of 140MW of photovoltaics (PV). By 2012, the report forecasts growth reaching 1.4GW to 2.6GW, driven by new state policies like the Golden Sun program that can cover 50% to 70% of the cost of solar systems, according to the two report authors, China-based Matt Miller and Matthiah Larkin.
During the same period, the full price of a solar system installed will drop from US$2.82 in 2009 to US$2.18, lower than in the US or Europe because of lower prices for labor, inverters and other factors. In the West, panels sell for approximately US$2 a watt. In China, a panel now sells for US$1.57 a watt.
By 2020, the cumulative installed PV base could grow to 10GW. As early as 2007, Chinese industry officials had aimed for 300MW by 2012 and 1.8GW by 2020.
The shift to solar could help deflect criticism internationally and more importantly de-escalate ongoing conflicts over coal mining and pollution in various provinces, but the main driver in the shift to solar is a concern over jobs. The country exports more than 95% of its solar panels. The global recession, however, has stoked fears that demand from Spain, Germany and the US could drop.
During the same period, the solar manufacturing footprint will grow from 5.6GW of capacity in 2009 to 8.1GW in 2012. In 2005, China had a production capacity of 400MW and a cumulative installed base of 70MW.
"Growth is likely to be lumpy and uneven, as bottlenecks will inevitably arise in the project approval and funding disbursement process," states the report. "There are many political layers involved (local government, provincial DRC, NDRC, and the Ministry of Finance, at a minimum), and because application volume will be extremely high."