China – Emerging Leader in the Global Solar Industry

For the past several years, solar module manufacturers in China have been increasing production and gaining market share in the solar power sector. However, the rapid development of new factories and resulting production has resulted in overcapacity, causing further downward pressure on pricing. A Forbes report titled “China’s Growing Role in the Global Solar Power Industry” states that across the world, the declining prices have impacted all solar panel manufacturers, however Chinese firms have been affected the most. With these concerns and the rising pollution levels in the country, China has planned to increase its domestic demand for solar panels with support from its government. Apart from being incredibly beneficial to the environment, this move is helping to support manufacturers in China based on the increased demand.

The report adds that solar installations have historically been concentrated mostly in Germany and Italy due to strong policy support. But now, installations in Japan, the U.S., Latin America and especially China are expected to grow faster. According to BBC’s report, Chinese government has decided to refund 50% of the value added tax to solar panel manufacturers from October 2013 to 31 December 2015.

With government support, China’s solar energy is poised to play a larger role in the global solar industry in the coming years.  By 2013-15, China plans to add 10 gigawatts of solar capacity each year with a goal to have 35 gigawatts of installed solar power capacity by the end of 2015.  This is seven times the five gigawatts that it had installed at the end of 2012, and is more than the 32 gigawatts that Germany had installed at the end of 2012.

This rapid growth China’s solar energy market will empower many of its manufacturers to remain in competition along with the other global players and better position them to capture opportunities from global markets.  Government support and incentives have also enabled Chinese firms focusing on silicon technology to advance their existing technology through acquisitions of innovative technologies from Western countries. The firms also plan to bring down production and research cost so that in future they can thrive profitably without subsidies.