As the planet’s biggest supplier of solar power panels, China always held lofty solar energy production targets. But those targets were unexpectedly quadrupled today as China looks to avoid the rising costs of fossil fuels. The new goals would be the equivalent of 21 gigawatts produced per-year by 2015 to help absorb excess supply of panels and support prices.
The target includes 1 gigawatt of solar-thermal power plants, Shi Lishan, deputy director of the administration’s renewable energy division, said by phone today, along with the assurance that the new plan will be issued “soon,” he said.
Previously, China had projected 5 gigawatts of capacity through 2015, with 20 gigawatts by 2020. Whilst the scale of the increase was unexpected, China has been considering raising their targets as solar panel makers – led by Suntech Power Holdings Co. and Trina Solar Ltd. – suffer from cuts in European subsidies and a global supply glut that drove prices lower.
“With a significant tumble in photovoltaic prices, the timetable for mass use is ahead of time,” said Lian Rui, a senior analyst for the research company Solarbuzz. “The new target is still very conservative; we expect the installation to surpass 30 gigawatts.”
Solar module prices have plunged about 42 percent to the current $0.87 a watt from a year earlier, squeezing profit margins of manufacturers, according Bloomberg New Energy Finance data.
JinkoSolar Holding Co. expects the domestic market to account for as much as 12 percent of sales in 2012, double that of 2011, whilst Yingli Chairman Miao Liansheng said in May China will account for 30 percent of revenue this year, while energy-conscious Germany and the U.S. currently make up about 80 percent of its sales.
Whilst the goal of using excess supply on it’s own domestic energy projects, analysts suggest that China’s decision will have been helped no end by the rising cost of fossil fuel.
Thanks to it’s large size, China’s own supply of coal has to be hauled a long way from their mines, or imported from other countries – and the cost of oil has driven up the price of delivered coal.