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  • China a Leader in Solar Revolution

Photonics Spectra
Mar 2010
Gary Boas, Contributing Editor,

Not for nothing is it called the Sleeping Giant. A variety of new markets and manufacturing possibilities are emerging in China, creating new opportunities for many in the optics and photonics communities. Chief among these, perhaps, is solar energy. China is positioning itself as an important – if not the important – player in this area. In the past few years, it has become a major producer of solar products, even as changing demographics make it one of the largest markets for renewable energy.

On one level, this may come as a bit of a surprise. China has never been known as a paragon of environmental friendliness. News of the country’s remarkable economic growth in recent decades has been tempered by images of coal plants spewing smoke into the air and blanketing the countryside with a cloud of pollutants, and by reports of the Yellow River nearly overflowing with waste.

More than anything, the recent push to develop renewable energy sources in China is a response to surging energy demand. In a Jan. 10, 2010, column, Thomas L. Friedman of the New York Times noted that the nation is “in the midst of the biggest migration of people from the countryside to urban centers in the history of mankind.” He added that China is determined to meet the skyrocketing demand with “cleaner, homegrown sources so that its future economy will be less vulnerable to supply shocks, and so it doesn’t pollute itself to death.” Solar has emerged as one of the more desirable of these sources; in the past year, governments at the national, provincial and local levels have been seeking to attract solar companies by offering a number of subsidies, including free land and generous support for R&D efforts.

China has been particularly aggressive in courting US-based companies. Since September, First Solar of Tempe, Ariz., eSolar of Pasadena, Calif., and Applied Materials of Santa Clara, Calif., have inked deals to build plants or open R&D facilities in China. The former two companies have announced plans to partner with China in developing 2-GW plants in the Mongolian desert in northern China. When completed, these will rank among the largest solar power plants in the world.

Bill Gross, CEO of eSolar, noted how much more assertive China has been than the US. The company applied for a US Department of Energy (DoE) loan for a 92-MW project in New Mexico, he told Friedman, and in less time than it took the DoE to complete stage one of the application review, China had approved the 2-GW project and was awaiting the beginning of construction.

Applied Materials, which produces the equipment used to make solar panels, opened an R&D center in the central Chinese city of Xi’an late last year, and in January the company relocated its chief technology officer to China. The move was “a natural extension of our desire to be close to where our customers are,” said Cathy Boone, senior director of global marketing and government relations with Applied Materials’ solar products group. “China is a huge manufacturing market for solar panels, so this plants us right in the heart of the customer base.”

Applied Materials of Santa Clara, Calif., recently opened an R&D center in Xi’an, China, where the company has extensive ties with universities nearby. The facility has an entire floor dedicated to training rooms and classrooms, so it will serve as a learning center as well, said a company representative. China now constitutes a sizable portion of the solar panel manufacturing market.

At the same time, the Chinese government has been very strong in instituting policies encouraging domestic demand for renewable sources of energy – thus creating an ecosystem with companies “from up and down the value chain,” Boone said.

Coming to America

Even as US companies are working to set up shop in China, many Chinese companies are trying to establish a presence in the US. On Nov. 16, 2009, Suntech Power Holdings announced in Beijing its plans to build the company’s first plant in the US. The facility, which will be located in Phoenix and begin production by October of this year, will have a 30-MW capacity, with enough flexibility to increase output to 200 MW.

Building a plant in the US will help Suntech lower delivery time and costs, and it will serve other goals as well. It will help to allay US lawmakers’ fears of China’s cornering the market on solar and other green manufacturing jobs. In addition, it could help the company – and possibly other Chinese solar providers – to combat protectionist policies in the US. Following Honda’s example in the auto industry in the 1980s, Suntech has suggested that its executives in the US join the two major industry groups, in part to discourage the groups from blocking its efforts in the American market.

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