Monday, May 14, 2007

Future of China's Solar Industry

The global solar energy industry is booming and China's is one of the fastest growing world-wide. However, severe global shortages of polysilicon, the key raw material in solar cell production, are inhibiting growth. China is only one production center in solar energy industry, the solar cells and solar panels are only made in China, but the key manufacturing technologies are monopolized by a small number of European, U.S. and Japanese companies, China's industry is particularly vulnerable.

What's more, the cost of solar electricity is still very high, without the subsidy from the government the market for solar electricity is very narrow.

It is reported that the global solar cell production output in 2006 is 2500 Megawatts, 1080 Megawatts higher than the installed solar cell in 2006. At present the installation is less than the production output, while the production output is less than the production capacity.

So even the Chinese manufacturers may have access to enough polycrystalline silicon, we should not be optimistic about China's solar energy industry since there is no big enough market for the huge production capacity, unless the solar electricity cost is reduced closed to the conventional electricity cost.