Taking a bath

Dark comes before the dawn for China’s solar industry

Taking a bath

Solar eclipsed

When the sun goes down, I take my rest” is one of the Middle Kingdom’s more self-righteous proverbs. For Zhao Chunjiang there is always the option of adding a decent soak in a tub of solar-heated bathwater. Zhao, the departmental director of the Shanghai University of Electric Power, has built the first solar “family power plant” in China, according to the Economic Daily.

With 22 photovoltaic (PV) panels of blue glass on his roof, Zhao will produce 3 kilowatts of power a year. The Economic Daily says this is enough to support ‘three generations under one roof’, if you assume Zhao lives with a wife, his two parents, and a single (one-child policy-derived) offspring.

Solar panels capture sunlight, knock together electrons into a higher state of energy, and then generate electricity. PV is a favoured solar technology because it generates power even on cloudy days.

In fact, China regards itself as a leader in the photovoltaic energy business and its 200 manufacturers produce about a third of solar panels globally. Suntech Power, a leading solar equipment provider, claims to have overtaken Japan’s Sharp in panel production volume in 2008.

But 98% of Suntech’s panels are exported. Despite constructing much of the world’s solar power infrastructure, China uses very little of it domestically. Experts estimate that less than 0.1% of national energy generation comes from solar sources.

This may be about to change, with news recently of the planned construction of a 30 megawatt solar power station in the Qaidam Basin in Qinghai province. China Technology Development Group Corp and Qinghai New Energy Group will invest a combined $150 million.

The timing is inauspicious. China Business News reported last month that Suntech was cutting up to 10% of its existing workforce, citing reduced international sales. The general scarcity of capital, as well as the plummeting oil price, has contributed to the industry’s malaise; research firm iSuppli forecasts that sales of photovoltaic panels will drop 19% in 2009, the sector’s first-ever contraction.

The high cost of silicon semi-conductors is the main culprit in China’s slow solar power take-up. With spot prices reaching $400 a tonne in 2008, almost 20 times those of earlier in the decade, silicon is just too expensive to allow solar power to compete with its dirtier cousins.

The cost of Zhao’s electric home brew is illustrative. His photovoltaic roof generates electricity at an average cost of Rmb1.2 per kilowatt ($0.18), twice that of the same consumption through the coal-fired national grid.

This is a shame, as China knows it needs to take the lead in diversifying its power sources. Its Renewable Energy Law, which went into effect in January 2006, ordered power companies to use a certain amount of renewable energy. But in failing to provide any financial incentives to do so, the regulations have not had much impact. Solar power activists want policies similar to those adopted by Angela Merkel, the German Chancellor, in which power companies are required to buy back surplus electricity from solar generators at a fixed rate.

Zhao argues that this type of scheme, as well as other governmental subsidies for clean technology, will trigger wider commercial consumption of PV power. But until it achieves “grid parity” – a cost to consume similar to electricity produced in coal fire power stations – solar energy is unlikely to catch on.

This is especially relevant for China’s rural areas, where 30 million inhabitants are still without mains electricity. In remote areas, particularly where the cost of producing and transmitting power is much higher, the economics of localised solar power generation should become more compelling.

Back in the city, Zhao’s dream is to see Shanghai’s rooftops encased in 200 square kilometres of photovoltaic glass. Zhao estimates that this would generate sufficient power to meet the needs of the entire city population. A dazzling proposition indeed.

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