China has cut a subsidy for solar projects under a demonstration program this year by more than 20% to reflect falling costs of photovoltaic system installations. The government will offer CNY5.50 per watt for the combined capacity of 1.71 GW approved for this year under the Golden Sun program. It earlier proposed to offer CNY7 per watt this year. Engineering, procurement and construction contractors typically ask for CNY8 to CNY10.50 per watt for solar projects today, said Liu Wenping, Analyst at investment research firm Pacific Epoch. Golden Sun was launched in 2009 to facilitate the development of China’s solar power industry and aims to cover 50% to 70% of the investment in solar installations. Developers must meet certain requirements in capacity, scale and capital to qualify for the subsidy. Cao Min, CFO of Nasdaq-listed JA Solar Holdings, said the solar industry may see improved prospects in the second half of 2012 or the first half of next year due to industry consolidation and improving demand. JA Solar signed a strategic R&D tie-up with the Shanghai Institute of Technical Physics of the Chinese Academy of Sciences (CAS). In January, the National Energy Administration (NEA) said China plans to double its solar power capacity in operation by installing 3 GW this year.

Cooperation in the development of green technology is another area that can draw China and Europe closer together, said Han Wenke, Director General of the Energy Research Institute under the National Development and Reform Commission (NDRC). France is at the forefront of nuclear technologies, while Denmark is strong in wind power, and Germany excels in solar energy. “Over the past five years, China has led the world in the rate at which it has installed new clean energy generating capacity,” said Phyllis Cuttino, Director of the clean energy program for the Pew Charitable Trusts, a Washington-based research group. A recent Pew report said China’s investment in clean energy totaled USD45.5 billion in 2011, which meant it fell behind the United States for the first time since 2009. “Still, China is leading the world in the production of wind turbines and solar modules,” Cuttino said. China aims to increase the proportion of non-fossil fuels to 15% of primary energy consumption by 2020, and technology is the key to realizing the potential of China’s clean energy market, she said. EU countries have core technologies and research funding, while China has a huge market and plentiful resources, said Zhang Min, Director of the Department of Science and Technology Policy Studies under the Institute of European Studies of the Chinese Academy of Social Sciences (CASS). “But there are problems that need to be addressed ― such as the slow pace of technology transfer ― that hinder the effectiveness of new energy cooperation,” Zhang said. Overcapacity is another issue facing China’s emerging green energy industry, Zhang added. A large number of Chinese companies have entered the clean energy market, leading to a surplus in the green energy equipment industry in China, the China Daily reports.

The SNEC International Photovoltaic Power Generation Conference and Exhibition was held at the Shanghai New International Expo Center. The world’s largest in the industry, the three-day event broke records with 2,200 exhibitors from five continents displaying their latest products across 200,000 square meters of exhibition space. Exhibitors included international PV giants and well-known enterprises such as Suntech Power, Yingli Green Energy, GCL, JA Solar, LDK Solar, REC, SMA, Hanwha-SolarOne, OCI and Dupont. Suntech showcased its “Pluto” technology, while Yingli put a spotlight on the World Cup Trophy. Trina brought its new Honey PV panels, SMA introduced its sister enterprises to the public and Dupont showed the industry its latest achievements. One of the keynote speakers at the conference was Martin Green, Executive Research Director of the ARC Photovoltaics Center of Excellence at the University of New South Wales in Australia. Green has been called “the father of modern photovoltaics”. Other speakers included Reinhold Buttgereit, Secretary General of the European Photovoltaic Industry Association; Rhone A. Resch, Chairman and CEO of the Solar Industry Association; Charles Gay, President of Applied Solar and Applied Materials and co-founder of the Greenstar Foundation; and Makoto Konagai, Chairman of the Japan Solar Energy Society and Professor at the Tokyo Institute of Technology. Other events included conferences on climate change, how to do business in the U.S. and a Sino-German cooperation workshop on photovoltaics, as well as sessions on the cross-Straits million solar roofs initiative, solar technology in China and Nordic countries, and understanding U.S. anti-dumping tariffs.

Website: www.snec.org.cn

The government should roll out policies to develop the rooftop solar power market in coastal eastern and southern regions. That would help relieve the loss-making solar panel industry’s overcapacity, said Shi Zhengrong, Chief Executive of Suntech Power, the world’s largest producer of panels. The nascent market segment has a potential 100 GW of generating capacity, 20 times the estimated growth in China’s solar power capacity this year, Shi told the SNEC International Photovoltaic Power Generation Conference in Shanghai. But implementing this means a challenge to the monopolistic power of the  two state-owned electricity-distribution firms, State Grid Corporation of China and China Southern Power Grid. They are now the only intermediaries between power generators and end users. Owners of the rooftops of residential and commercial buildings who mounted solar panels would be able to sell the power they generated in excess of their own consumption to the power grids. “This is not easy, since it involves major reform of our power generation and distribution industry, but the solar industry must keep sending letters to the government year after year to push the reform,” Shi said. He hoped the policies could be rolled out within two years. “The danger is that the solar industry may suffer from the same problem as the wind farm industry, where over 10% of power output cannot be dispatched to the grid,” Shi added. China’s solar panel industry, which exports about 85% of its output, has built too many plants and has suffered from a slowdown in growth in overseas markets. Its biggest market, Europe, has cut back subsidies amid its sovereign debt problems. Dr Henning Wicht, Solar Sector Analyst at research firm iSuppli, projected global prices of solar panels would fall a further 20% this year after declining 38% last year. He also forecast that the growth rate of solar panel installations worldwide would drop to less than 10% this year and next year, from 55% last year, before recovering to between 20% and 30% between 2014 and 2016, the South China Morning Post reports.

China denounced the United States’ decision to impose additional punitive duties on its solar products, saying America is sending negative signals of trade protectionism to the world. The U.S. Commerce Department said in a preliminary ruling that Chinese exporters had dumped solar cells and modules at margins ranging from 31% to 250%, siding with some American solar companies, including the U.S. unit of Germany’s SolarWorld, that filed the complaints. A final decision on the tariffs will be made in October. Shen Danyang, Spokesman for China’s Ministry of Commerce (MOFCOM), said that the U.S. ruling was unfair and amounted to trade protectionism. The tariffs will hurt both Chinese companies and American users, he added. The move also faces opposition at home, where U.S. critics said the tariffs could slow clean energy development and increase costs for American consumers. The new tariffs would be in addition to the anti-subsidy tariffs of up to 4.73% imposed by the U.S. earlier this year on solar panels from China. Chinese solar makers have denied selling products below market prices, instead suggesting that technology advancement and large-scale production had helped drive down production costs. “These duties do not reflect the reality of a highly-competitive global solar industry,” said Andrew Beebe, Chief Commercial Officer of China’s Suntech Power Holdings Co, which was told to pay 31.22% as antidumping fees. In its investigation, the U.S. used production costs in Thailand, which produced about 0.1 gigawatt (GW) of solar panels last year, as a proxy for costs in China, which manufactured about 15 GW, according to Li Junfeng, President of the Chinese Renewable Energy Industries Association and an official of the National Development and Reform Commission (NDCR), the Shanghai Daily reports.

CLSA’s Charles Yonts said the final duty imposed would be less than 10%, “which would allow [U.S. President Barack] Obama to show that he’s being tough, but not really have any impact and threat of retaliation”. China exported USD3.1 billion of solar cells to the U.S. last year. The U.S. decision to impose import duties on Chinese solar panels will raise their price to USD1.11 per watt, 17% higher than the current spot price of non-Chinese panels, according to calculations by Bloomberg New Energy Finance. China retaliated by saying the U.S. grants subsidies to its renewable energy companies, which are prohibited under World Trade Organization (WTO) rules and can distort normal trade. Chinese solar panel shipments to North America may be cut by 75% this year because of the anti-dumping ruling, according to California-based IHS. The cut in Chinese supplies may reduce North America’s total panel imports by 45%, driving up prices for the modules. The consulting company had estimated Chinese manufacturers would account for 2 GW of imports, a figure it says may now drop by as much as 1.5 GW. “The penalties are likely to add as much as 12% to the cost of solar modules, lowering the average return on investment for solar systems in the region by as much as 2.5%,” said IHS Photovoltaics Analyst Mike Sheppard. Meanwhile, China is developing third generation photovoltaic technology, which may help Chinese PV makers circumvent the tariffs, according to He Zuoxiu, Academician at the Chinese Academy of Sciences (CAS). The third-generation technology combines purified silicon (from solar furnaces), sun-tracking technology, light concentration and integrated high-concentration photovoltaic systems. Pilot projects in Gansu and Inner Mongolia have yielded promising economic results, according to He. The new type of technology is different from the first generation, which is based on crystalline silicon.