Comment: Will China's solar sector weather the downturn?

4 March 2009

China's once-mushrooming solar sector is feeling the pinch of the global economic downturn.

As demand falls and project funding dries up, Reuters reports that China's industry is bound to consolidate and that only big players, such as Suntech Power Holdings (a Climate Group member), are likely to survive.

There may be a silver lining to this, says Changhua Wu, Greater China Director of The Climate Group:


"The current tough time presents an opportunity for Chinese solar PV sector to further consolidate and reduce the chaos and overcapacity that has been experienced in the last few years. I believe not only that leading solar industry companies will weather this storm, but that very soon, we can expect to see a stronger and more competitive solar industry in China, led by such leading companies like Suntech Power, Himin Group and others.

"To capture the opportunity, government has an important role to play. The approved stimulus package in China clearly states the importance of renewable energy, including solar energy. But more importantly, specific subsidies or incentives need to be clarified and put in place to give the solar industry a strong boost so that they would be able to reach the scale needed to reduce our dependence on fossil fuels.

"The opportunity could also come from cooperation among countries. For instance, US and China could work collaboratively to develop a solar program and even officially launch it at Copenhagen as a significant showcase of both willingness and leadership in addressing climate change issues.

"The size and scale of renewable energy needs in these two countries would literally decide the future market of solar energy globally."


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