China’s solar energy market looks like it is about to take a massive leap forward at the end of 2013.
Policies at all levels of Chinese government indicate that serious growth is a real possibility by the end of the year, as a number of projects are completed.
According to Deutsche Bank analyst Vishal Shah, there are five reasons that are driving China's solar demand to new heights:
- Economics are attractive. Internal rates of return are in
the low- to mid-teens for some utility-scale projects, and low-cost financing
is being made available from central government policy initiatives.
solar being used in china
- Companies are heading downstream. "Relatively attractive project economics" are luring more companies into that side of the sector. Project development typically takes 12-18 months, so look for the backlog to grow "exponentially over the next two years," Shah says.
- Local incentives. Provinces are announcing local incentives to promote growth, and most of China's 31 provinces should be offering something over the next year.
- Easier leasing options. Companies and local governments should improve land and financing constraints, and also come up with leasing business models for residential/commercial solar, according to Shah.
- Central FITs. With central government feed-in tariffs (FIT) likely to be revisited annually, expect a increase of installations nearing the end 2013 and 2014.
Shah is predicting Chinese solar demand could rise to 13-15 GW in 2014. Add Japan's large market control(which shah puts at 6-7 GW next year), these Asian nations could take over half the global demand!
This should be a wake up call to Americans, to get up off their bottoms and get serious about the solar energy game. But with the current goverment shut down, it doesn't look like that is going to happen, at least not with the help of government incentives.
And it is those incentives which have proven to be a strong catalyst for alternative energy growth. As china can prove!