From Greentech Media

Demand for solar panels inside of China could explode over the next three years, presenting an opportunity for investors and select international partners, according to a new report from GTM Research, the market research arm of Greentech Media.

China has a cumulative installed base of 140 megawatts of PV. By 2012, the report forecasts growth reaching 1.4 gigawatts to 2.6 gigawatts, driven by new state policies like the Golden Sun program that can cover 50 to 70 percent of the cost of solar systems, according to two authors, China-based Matt Miller and Matthiah Larkin.

During the same period, the full price of a solar system installed will drop from $2.82 in 2009 to $2.18, lower than in the U.S. or Europe because of lower prices for labor, inverters and other factors. In the West, panels sell for approximately $2 a watt. In China, a panel now sells for $1.57 a watt.

By 2020, the cumulative installed PV base could grow to 10 gigawatts. As early as 2007 Chinese industry officials had aimed for 300 megawatts by 2012 and 1.8 gigawatts 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 percent of its solar panels. The global recession, however, has stoked fears that demand from Spain, Germany and the U.S. could drop.

During the same period, the solar manufacturing footprint will grow from 5.6 gigawatts of capacity in 2009 to 8.1 gigawatts in 2012. In 2005, China had a production capacity of 400 megawatts and a cumulative installed base of 70 megawatts.

"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."

The report, based on dozens of on-site visits to industry officials, policy makers and installation sites, offers a detailed look at China's power industry and policies over the last three decades, and how they could shape the country's solar energy development.

See the summary and download a free executive report at: http://www.gtmresearch.com/report/china-pv-market-development.

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