Introduction
The growth of the PV industry has been on increase due to technological advancements and the support the industry has been getting from governments.
The industry has also witnessed remarkable growth occasioned by concerns on global warming. It has been projected that solar energy demand will continue to grow in China and other parts of the world (Tiwari, 200).
However, the energy form has still been expensive in comparison with other forms of energy. This is because the industry has been grappling with a shortage of raw materials used in producing the energy. For instance, demand for silicon which is used in the manufacture of solar cells has been increasing.
Background
China has plans of developing large amounts of hydropower, wind power, biomass and solar photovoltaic by 2020. In order to accomplish this mission, the country requires at least 267 billion USD for it to invest in renewable energy sources.
Investment in renewable energies such as biofuels and wind energy has been slowed down by concerns of global warming. China has projected that by 2020, an estimated $ 40 billion would have been invested in solar energy. As part of the plans to have enough energy, the country has embarked on the use of solar energy.
Analysis
The gross domestic product in china has been growing significantly thus stabilizing the country’s economic forecasts. As a result of this increased economic growth, the country’s demand for energy has been increasing thus prompting the government to come up with renewable sources of energy.
Due to the popularity of solar energy and its domination in the world market, it has been the most appropriate option for the country. This has led to stiff competition among several companies providing solar energy in the country.
For instance, in 2007 four Chinese companies paved their way into the market and made huge profits. In 2006, two more companies had raised more than $ 500 million after joining the list.
These companies have been attracting investors since their prices have been lower than the prices offered by Western manufacturers (China solar, 2004).
The Chinese government has taken important measures in improving the environmental condition of the country. New laws on renewable energy sources have been enacted to emphasize on cleaner energy technologies.
The country has a target of raising the number of people who use renewable energy to 16% by 2020. The new law has various stipulations that should be followed by the companies involved.
To begin with, the energy authorities have been mandated to implement and manage renewable energy development. Secondly, the government establishes a renewable energy development that provides support including financial support to the relevant industries.
Thirdly, the government has been involved in setting the prices of renewable energy and supporting the generation of grid-connected renewable energy
Due to the sustainability of sola energy in china and its advantages over other alternative sources of energy, the Chinese government has embarked on constructing resource efficient villages.
The largest portion of domestic PV market in china which constitutes more than 40 % is rural electrification. The program aims at making electricity accessible to more than 20 million Chinese who live in 20000 rural villages.
10 million people out of the 20 million are residents of the Western provinces. The rural electrification program impacts millions of people living in rural areas by empowering them through access to energy. As a result, solar energy has been one of the most common and widely used renewable energy n China .
Argument Against
Despite the widespread use and popularity of solar energy in China, there has been a negative side of the renewable energy resource. Constraints in the supply of silicon have remained one of the most challenging hurdles.
The silicon market has been so tight thus creating a disadvantage for a large number of players who have been unable to secure feedstock supplies.
The downside has been particularly experienced by the small scale solar dealers who have not succeeded in getting silicon supplies. This has led to lower rates of utilization, lower profits, and unmet growth plans.
Domestic polysilicon producers also have been facing problems such as less beneficial technology which uses 2-3 times the energy used in production of an equal amount of raw material than its oversees peers do.
Domestic polysilicon manufacturers have also been smaller in size when compared with the international players, something that has made it difficult for them to leverage the economic scales.
Initially, the overseas competitors were reluctant to transfer the knowledge to Chinese natives forcing the domestic enterprises to employ a high degree of innovation and independence in their work (Source guide, 2012).
Announcements have been made by companies with emerging technologies or commercial ambitions expressing their interest to venture in polysiliscon manufacturing.
However, such ventures have been faced by commercial, technology, safety and environmental risks. The commercial risk is that there has been a high degree of competition from famous and well known producers who have been in the business for long.
The technology risk comes in due to the presence of the well established and fully characterized Siemens which has been operating in the country.
There has also been a safety risk in that most of the intermediate gaseous chemicals used in the production of silicon can result into a spontaneous fire when in contact with air.
This is something that has caused fatal accidents in the past. Finally, there has been the environmental risk in that although production of silicon has been for green products, chances of pollution are also possible .
Despite the fact that China has been capitalizing on the lucrative IPO and the heavy investment, the market has been criticized of fatigue, especially at the mid heading downstream, while companies that have not been listed have found it difficult to differentiate themselves.
This has been recently indicated by the poor performance of some of the stock prices for the enterprises. However, it has been said that the market is yet to be exhausted since some Chinese silicon manufacturers are yet to join the market.
Recently, the grid companies have not been showing quick response to solar energy owing to its high cost. Alternatively, wind power has remained popular and a stronger substitute. The domestic market will not receive sufficient stimulation unless there is reduction in the cost and favorable subsidies provided.
Conclusion
Solar energy is a green trend that has found popularity in Chinese market in recent days. The rapid economic growth in the country has increased power requirements prompting companies to look for ways of investing in alternative sources of energy.
Solar energy has been highly preferred because of its environmental friendliness as opposed to other forms of energy. The country has since embarked on projects of spreading the energy form to rural areas through rural electrification.
However, there have been concerns that solar energy is still very expensive when compared with other energy forms such as wind energy. As a result, more attention has remained on the other energy forms that are considered cheaper.
References
China solar. (2004). China Solar Energy. Web.
NBSC. (2012). National Statistics. Web.
Solway, A. (2009). Renewable Energy Sources. New York: Heinemann/Raintree.
Source guide. (2012). The Source for Renewable Energy. Web.
Tiwari, G. (2009). Solar energy technology advances. New York: Nova Publishers.
Zheng, S. (2006). Solar Energy in China. Web.