China is the 4th largest by area and the 1st in terms of population, in the world. The China's growth is attributed to the strong reforms in its economic policies that have made it to emerge out as a strong contender within a span of 30 to 35 years. China is the largest exporter and one of the largest economies in the world. You can find the Chinese products in most of the the countries of the world.
Facts & Statistics
Let us look at the Solar PV growth of China in last 14 years:
This shows an impressive average annual growth of more than 180% in last 14 years. The post 2010 era has been very aggressive in terms of solar PV installation in China. The Chinese Government has set up a target of 100 GW solar PV installations by 2020, which gives an average of 12 GW of solar PV installation per year from period 2015 to 2020.
What are the main factors that are propelling its growth in Solar PV market?
The main factors which are responsible for the rapid transition in energy portfolio of the country are as follows:
(1) Abundant Solar Power generation potential in the Western and Northern region of the country
China has an estimated annual solar energy potential of 19,53,6000 TWh (TerraWatt hour). If we divide China in four zones, then solar radiation in these 4 zones can be shown in the table as shown below:
Please look at the solar radiation chart which is as shown below:
You can see that the Western region and most of the Northern region receives radiation which is higher than the rest of the country. This abundant solar resource in this region has promoted and facilitated the growth of solar PV in this region.
Please look at the following information shown in the tabular form:
(2) Alarming levels of \(CO_2\) emissions in the country
The China's increasing energy consumption and dependence of fossil fuels has increase the \(CO_2\) levels in the country and are increasing at the average rate of 8% per annum. The following table below shows the increase in the \(CO_2\) levels:
The \(CO_2\) emissions levels have increased by 2.5 times since 2000 and China' share is around 23% of the total \(CO_2\) emissions in the world and this makes it the largest emitter in the world. By looking at the worsening air quality that can affect the health of the people, the Chinese government has decided to cut down the consumption of coal, (the main source of \(CO_2\) emissions in the country) by gradually shifting towards renewable energy to produce electricity. The government has decided to increase the share of renewable energy to the total energy consumption to 20% by 2030.
(3) Government support to solar PV manufacturing
The China has become a worldâ€™s leading solar manufacturing facility because of government favorable policies and incentives. The MoST (Ministry of Science and Technology) programs were initiated by the government in the year 1999 to support the small high tech firms to encourage innovation in the manufacturing process so as to boost the performance of solar cells. The Chinese government launched this program with various incentives for the manufacturers like:
China made efforts to facilitate the solar PV growth by reducing the regulatory obligations and introduced "National Solar PV subsidy program" in 2009 to accelerate solar PV growth in the country. This program offered project subsidy for 2- 3years. The competitive bidding for the price discovery was initiated and fixed or benchmark tariffs were set for the specific wattage of the solar PV projects in the different locations of the country. This program proved successful and the solar PV installations started growing at the fast pace after 2009 in the country.
A strong government support in the solar manufacturing sector along with supportive policies has made China to dominate in the global solar PV market. The China's export oriented economy and the recent development in the solar PV sector across the globe will help China to maintain its high growth. The vertical integration approach has made China to reduce its overall cost of manufacturing that has managed to make its hold across the global solar PV market. The development in the distributed solar PV to generate electricity is relatively less as compared to the utility based solar PV projects. The utility based Solar PV projects are located in regions where solar insolation levels are higher; these regions are less developed and less populated, hence the electricity consumption is less. There are transmissions losses when the electricity is transmitted to the densely populated regions which are far off from these areas. So in order to maintain the economies of scale, the government should consciously make efforts to accelerate the growth of distributed solar PV by encouraging (with incentives) the local installers to design and size solar power systems as per the energy needs of people in the densely populated areas of the country so as to realize the full potential of solar energy in the country.
It will be interesting to see that if China be able to maintain the quality and efficiency of solar roofs along with the reduction in the prices or there will be a shift in the solar PV cost trajectory from China to some other country in an attempt to dominate the solar PV market?