China aims to boost domestic solar sector

The Chinese government has set new targets for domestic growth in the solar power sector under its latest five-year plan.

During China's last five-year plan (2005-10), the country's production of solar panels grew more than 100 percent annually, with more than 90 percent of its panels exported to the United States and Europe.

China's new plan comes as the U.S. Department of Commerce is to make a preliminary determination Friday regarding anti-dumping and anti-subsidy trade petitions against Chinese solar manufacturers to halt what the petitions characterize as pervasive, systemic use of state support to injure the U.S. industry.

And a report released Monday by U.K company IMS Research shows that four of the five largest suppliers of photovoltaic modules by shipment volumes are Chinese firms.

In December, the U.S. International Trade Commission issued a preliminary determination saying that the Chinese imports are harming the U.S. solar manufacturing industry.

The new plan for the solar industry, published by China's Ministry of Industry and Information Technology, aims for the country's leading polysilicon manufacturers to achieve a production capacity of 50,000 tons by 2015 and for top solar panel makers to have a capacity of 5 gigawatts.

It also calls for 80 percent of solar equipment and auxiliary materials to be produced in China.

As for sales targets, China's new plan aims for at least one solar company to reach $15.9 billion in sales by 2015 and up to five other companies to achieve sales of $7.9 billion, also by 2015.

Lu Yeung, an analyst at Union Bank of Switzerland told Recharge News that he expects the new plan to encourage consolidation in China's solar sector, giving leading companies more room for expansion. He said it shows government support for mergers and restructuring of companies.

"It's a medium-term positive for the (domestic) sector," Lu said.

Under the new plan, China aims to reduce the cost of solar power to 12 cents per kilowatt hour by 2015 and by 9 cents by 2015.

Chinese government data indicate that the country installed about 2.2 gigawatts of solar power last year.

"It is time for integration of the industry," said Wu Zhonghu, an expert at the China Energy Research Society, was quoted as saying by China Daily newspaper. "The PV solar industry has a prosperous future but at present, there are many obstacles, including high costs, shrinking overseas markets and a lack of related laws and regulations to supervise the industry."


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