Renewable energy sources provide about 7% of all energy consumed at present. This is supposed to increase to 10% by 2010 and to 16% by 2020. One source claimed that hydro-electric power would be the top priority, followed by wind and then solar. But critics claim the government is not committing the necessary funds to meet its targets.
High installation costs and low returns in the solar industry mean that its growth will depend on government support. The biggest obstacle in solar power is the industry's inability to link small-scale power production units to a larger power grid.
There are currently small trials in Beijing and Shenzhen where solar energy is being combined with power generation grid networks. Grid connection allows excess capacity to be sold back to the power grid. More optimistic voices claim that the government will promote the domestic installation of renewable energy like solar in the near future.
Shenzhen city is leading the way by making the use of solar power mandatory in new housing construction, according to the state media. The law requires all new residential buildings with fewer than 12 storeys to install solar-powered water heating systems.
To meet growing demand, solar energy companies are boosting their production capacity. For example, Solarfun plans to expand its capacity for solar cells and solar modules from 120 megawatts (MW) and 60MW respectively to 360MW and 300MW by 2008.
Cloudy outlook for China's solar industry
Agence France-Presse, Beijing
South China Morning Post online
Review by Morice Mendoza