CHINA WINNING THE SUN RACE

China Racing Ahead of U.S. in the Drive to Go Solar
Keith Bradsher, August 24, 2009 (NY Times)

"…China that has stepped on the gas in an effort to become the dominant player in green energy — especially in solar power…Chinese companies have already played a leading role in pushing down the price of solar panels by almost half over the last year. Shi Zhengrong, the chief executive and founder of China’s biggest solar panel manufacturer, Suntech Power Holdings, said…[his company] is selling solar panels on the American market for less than the cost of the materials, assembly and shipping [to build market share].

"Backed by lavish government support, the Chinese are preparing to build plants to assemble their products in the United States to bypass protectionist legislation…[and working] to tamp down anti-Chinese sentiment before it takes root."

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"The Obama administration is determined to help the American industry…[most recently with] $2.3 billion in tax credits to clean energy equipment manufacturers. But…Western companies may have fragile prospects when competing with Chinese companies that have cheap loans, electricity and labor, paying recent college graduates in engineering $7,000 a year…[and] governments at the national, provincial and even local level…[that] offer solar companies ever more generous subsidies, including free land, and cash for research and development. State-owned banks are flooding the industry with loans at considerably lower interest rates than available in Europe or the United States.

"…[Suntech] is on track this year to pass Q-Cells of Germany, to become the world’s second-largest supplier of photovoltaic cells… behind only First Solar in Tempe, Ariz…[A] growing list of Chinese corporations backed by entrepreneurs, local governments and even the Chinese military [is] seeking to capitalize on an industry deemed crucial by China’s top leadership…"

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"China’s commitment to solar energy is unlikely to make a difference soon to global warming. China’s energy consumption is growing faster than any other country’s, though the United States consumes more today. Beijing’s aim is to generate 20,000 megawatts of solar energy by 2020 — or less than half the capacity of coal-fired power plants that are built in China each year…Solar energy remains far more expensive…than energy from coal, oil, natural gas or even wind. But in addition to heavy Chinese investment and low Chinese costs, the global economic downturn and a decline in European subsidies to buy panels have lowered prices.

"…[Suntech] will build a solar panel assembly plant in the United States…Yingli Solar, another large Chinese manufacturer…[also plans] to assemble panels in the United States…Western rivals (Germany’s Q-Cells, Conergy and SolarWorld), meanwhile, are struggling… because of declining sales…[But resistance] to Chinese exports could be difficult, particularly as [1] Chinese discounting makes green energy more affordable…[2] First Solar…the solar leader… using a different technology…is actually profitable…[3] [Suntech] executives at its United States operations…[hold] the top posts at the two main American industry groups…[and, 4] almost 98 percent of Suntech’s production goes overseas."