CHINA: September 20, 2007


BEIJING - Solar panels could generate over 10 percent of China's power by the middle of the century, but only if Beijing steps up support for pioneering generating plants and sets more ambitious targets, a report said on Wednesday.


Although it is the world's No. 3 producer of photovoltaic (PV) cells that convert sunlight into electricity, China sends 90 percent of its output abroad because it is too expensive for domestic use, according to the report launched by Greenpeace, the Chinese Renewable Energy Industry Association (CREIA) and WWF.

High PV cell prices and low power tariffs mean the cells that do stay in China are mainly used for rural areas, communications, and in industry, rather than for large generating plants linked into national grids -- the main users in other countries and the key to large-scale solar generation.

Beijing aims to boost the portion of its power that comes from renewable energy, and has set out what it says are ambitious targets for the next two decades, aiming for 15 percent of energy to come from non-fossil fuel sources by 2020.

But the report says government solar energy targets are not very challenging, and supportive policies that look good on paper are not being properly implemented, the report added.

With strong government support, China could be generating an estimated 1,300 terawatt hours of solar power a year by 2050, of a total 10,000 TWh used nationwide, it added.

But currently around a dozen pilot plants with capacity of up 1 MW, which should be getting preferential prices, are not even able to link up with transmission networks.

"In no case has a feed-in tariff, calculated according to reasonable costs plus reasonable profits, been implemented, and no PV power system has as yet been permitted by grid companies to connect," the report said.

The report predicts that solar power prices will match conventional power prices by 2030, when installed capacity could be up to 100 GW with strong government support -- or one-sixth of the country's total generating ability at present. But without support through the years when it cannot compete on price alone, solar will be just one-tenth that potential level, a still impressive 10 GW but far from enough to make a dent in China's energy-related pollution problems or to contribute to its energy security.

"Market supportive mechanisms create incentives to technological innovation and industry development," Li Junfeng, CREIA General Secretary, said at the report's launch.

"The lack of a strong domestic market could limit the potential of the Chinese solar PV industry in the long term."

China at least does not lack the raw material for solar power. About 96 percent of the country gets "abundant" sunlight, the report said, with more light potential than industry leaders Japan and Europe.

Many of the sunniest areas are also sparsely populated, lowering the prospects for potential disputes over land use.


Story by Emma Graham-Harrison


REUTERS NEWS SERVICE