by Yariv Cohen, Ignite Power

Leshan city, in the Sichuan province of southeast China, is an industrial zone, 120 kilometers (75 miles) away from Chengdu. The city boasts a 71-meter (233-feet) high ancient Buddha that was built in the 7th century, and is the largest carved stone sculpture in the country. It is also the planned location for the construction of a 10-GW solar-cell factory, expected to be built with a total investment of RMB4.3 billion [US $652 million]. The factory is only one of many others expected to be constructed in the coming year, as part of China’s globally-leading PV manufacturing scheme.

For the past decade and a half, China became the dominant player in the PV manufacturing field, after the sector received critical help from government subsidies back in 2004. Between 2006 and 2013, China’s global share of production of PV cells, the solar industry’s core technology, surged from 14 percent to 66 percent. During this time prices of solar panels including installation, shipment, and average price per watt of PV capacity sharply dropped, some by over 80 percent, while the global market grew eighteen-fold.

Manufacturing at an unprecedented pace

In the early 2000’s, China set its sight on the solar industry, and began hiring international solar experts and shopping for the necessary manufacturing machinery, while inviting global market leaders to move their manufacturing to the country, where they could find cheap, skilled labor, and tax credits. The federal government released vast subsidies and invested as much as $47 billion to help build its solar manufacturing into what it calls a “strategic industry.” Expanding renewable energy became one of seven categories of business that receive special attention including loans and tax incentives under China’s five-year plans.

The investment was undoubtedly enormous, but this time around, production capacity expansion is at a much larger

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