中国的太阳能开发

Giles Parkinson

Hidden away in a government gazette this week was an announcement that China would introduce a national feed-in tariff for solar energy. It took a day or two for the significance to dawn on the market, but it is now being viewed by analysts in an industry full of landmark developments as possibly the biggest of them all.

China has, in recent years, come to dominate the global market for solar panels, but it has so far installed little in its country – just 0.8 gigawatts in a grid that has grown to nearly 1,000GW. It has preferred to use the world market – which has grown to more than 40GW of installed solar capacity – as its test tube, and to refine its products.

And, it has also been conscious of the problems of its wind industry, which grew so quickly that many turbines were either of sub-standard quality or could not be connected to the grid, and it has learned carefully from those failures. Now, it seems, it is prepared to hit the “Go” button.

China does have more than 100 million homes that use solar hot water, but unlike other countries, China’s solar market is expected to be dominated by utility-scale projects rather than rooftop panels, as most people live in units and apartments. And rather than jumping in with huge projects as their first investment, as is occurring in Australia, the Chinese have been keen to understand what works and what doesn’t.

Over the past few years, China has been testing various solar tariffs on a regional or on a strictly targeted basis – offering incentives for a series of utility-scale solar projects that have started at modest size and have gradually been scaled up – 1MW, 5MW, 10MW and then 20MW – before now being rolled out on a national scale.

The structure of the tariff is also fascinating. At 1.15 renmimbi/kwh ($A0.16) for projects approved before July 1 and falling to 1 RMB for projects approved since then, the tariff is the lowest national tariff in the world. Clearly, China does not think it needs much to kick start the domestic solar industry. There are several reasons for this.

The cost of solar has dropped so rapidly in the past two years that solar is now thought to be already competitive with wind in many regions in China, some of which have excellent solar radiation, particularly in the western desert regions. These regions can produce solar energy at double the efficiency of other regions. China also needs a smaller tariff than other countries because of lower labour costs and supply chain advantages (they make the stuff there).

And it is also close to parity with coal-fired power for local industrial users who, unlike other countries, pay a significantly higher tariff than individual consumers. According to one report, LDK Solar, China’s most integrated solar energy company, expects the levelised cost of energy of its solar modules to fall below average grid levels in China to around $US0.07/kwh in 2012. It’s a massive irony, and an amazing opportunity for the solar industry that the (coal-fired) electricity used by companies such as LDK and Jinko Solar to make their modules is already more expensive than the energy produced from those modules.

This is expected to translate into a dramatic lift in production that will rival that of wind – where China went from a standing start in 2005 to the number one installer in 2010, with 17.5GW. In 2008, only 40MW of solar was installed in China. In 2011 that is expected to reach 1GW, double in 2012, and by 2015 the installation rate is expected to ramp up to 10GW a year. Given its competitiveness with wind, some analysts expect it to match and overtake the annual wind installation rate of 15GW, which is by far the largest in the world.

“They have wanted to do a controlled ramp up,” says Tim Buckley, an investment manager with clean energy fund Arkx, which invests in China solar companies. “They have got huge aspirations, I think the growth will mirror wind. With wind they went too early, but with solar they now have the best technology in the world.”

Analysts say the China decision effectively underwrites the growth of the market. IMS Research upgraded its forecast for China in 2012 by 1GW after the tariff announcement. Germany, which has been growing at 7-8GW a year, is about to reach congestion point and is expected to fall to around 3-4GW. Other European countries such as Italy, France and the Czech Republic are also tapering off as tariffs are wound back. The US market, underpinned by government loan guarantees, has been one of the few bright spots.

Analysts believe the surge in domestic demand in China also means that costs will continue to fall. Module prices are coming down rapidly – falling by 20 per cent for each doubling in demand, and GCL, a Hong Kong listed Chinese company that has suddenly emerged as the world’s biggest supplier of poly-silicon, and is expected to deliver it at a price of $40 a kilo in 2012, around half of the price in 2010 and one tenth of the price in 2008.

“The economics of the varying power generation alternatives have been changing rapidly, however, and solar power is close to rivalling industrial as well as wind power grid pricing,” the website Seeking Alpha wrote in an analysis. “China’s annual wind market alone is double Germany’s record solar market in 2010. Thus it would not be unreasonable to assume China’s solar demand could reach similar levels once the cost economies converge.”

Buckley believes that the economics of solar projects in China will become irresistible in the next three to five years. Analysts estimate that at the current tariff, project developers can bank on an internal rate of return of up to 10 per cent over 15-25 years. With long-term power purchase agreements, that’s enough to attract 80 per cent debt funding for projects. “And once you get to grid parity, solar technology development does not just stop,” Buckley said. “Solar plants with an operating margin of 80 per cent. Parity dramatically changes the dynamics of energy pricing and it will drive average energy prices down over time. It potentially pushes coal from being the lowest cost baseload supplier of energy to being the marginal supply because of its high raw material costs.”

Having started small, the scale of some of the projects being contemplated in China is enormous. The US firm First Solar, which makes thin-film solar panels rather than silicon-based panels, is planning one project of 2GW in inner Mongolia. It will likely be the size of Manhattan.

Still, even at a rate of 15GW a year, solar would remain a fraction of the 100GW that China plans to add each year to its national grid to meet soaring demand. But, if solar’s costs continue to fall, energy efficiency measures take hold, and economic growth slows, then solar – along with hydro, offshore wind and onshore wind – could be accounting for nearly all of the new-build energy plants by the end of the decade. The most obvious victim is coal. That, in turn, could have significant implications for major coal exporters such as Australia.