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China suppliers go 'green' to counter energy shortage

Companies make a significant long-term investment in solar and wind power.

China manufacturers are turning to renewable energy to sustain operations in the months ahead as the country continues to face a shortfall in the supply of electricity. The power shortage is expected to reach about 40 million kilowatts in 2012, according to the China Electricity Council, as consumption increases to 514 million kilowatt hours. This represents a 10 percent jump YoY.

Zhejiang University Sunny’s selection includes PV cells, panels and roofing systems.

The “green” shift is evident in Jiangsu, Zhejiang, Shandong, Guangdong and Fujian provinces, and Shanghai, China’s key production and export hubs. Falling prices are helping to spur makers’ investment in solar and wind power.

Quotes of mono- and polycrystalline PV modules, for instance, have decreased 10 to 15 percent in the past year and are now at $0.70 to $1 per watt. Sliding material costs play a significant role in the downtrend. Crystalline silicon rates have gone from a high of $300 to $400 per kilogram about four years ago to $20 currently for major providers of the input. Other SMEs place the per-kilogram cost between $35 and $40.

As for 1.5MW wind turbines, prices went down nearly 8 percent last year to about $547 per kilowatt. Makers expect rates to be stable this year. Quotes previously decreased about 4 percent, from $615 per kilowatt in 2007 to $592 end-2010. The capability to make key components in-house helps protect margins amid the price reductions. Large enterprises can manufacture generator fans and gearboxes for their own use.

The same is true for suppliers of PV systems. “In-house production of inverters and frames gives us more control over final prices,” said Li Fu Chun, general manager of Zhejiang University Sunny Energy Science & Technology Co. Ltd.

The shift to green energy is quite natural given China’s extensive manufacturing experience in environment-friendly power sources, particularly solar.

In Jiangsu, a growing number of businesses are installing solar roofing systems on their factories. The province is a major exporter of PV cells and panels. It is also home to Suntech, one of the world’s largest suppliers of the last.

Jiangsu Liburui Garment Co. Ltd has invested more than $7.8 million for the endeavor. The project will be finished by April 2012, but is already partly operational, providing 30 percent of the maker’s power requirements. The roofing system has generated 140,000 kilowatt hours since August last year. Annual output will reach 2 million kilowatt hours, said office director Han Ya Ping.

Changzhou EGing Photovoltaic Technology Co. Ltd, a major local maker of PV panels, has a new factory equipped with 9.3MW crystalline silicone solar roofing.

Expansion opportunities

Manufacturers of eco-friendly power sources foresee continuous growth opportunities, not just within China but also overseas, particularly in countries with renewable energy policies.

Germany’s solar roofing program, for instance, aims to have 80 to 90 percent of establishments fitted with PV roofs, said Meng Xian Jin, vice president of Chinese Renewable Energy Society. The US and the UK have similar endeavors.

Resultant demand is spurring product development in China. Efforts, however, continue to revolve around crystalline silicon modules due to cost concerns over amorphous silicon types. At present, only 10 companies, including QS Solar, offer the latter.

QS expects a-Si modules will be mainstream in two years. By then, the per-watt cost of thin-film panels will be $0.50 lower than crystalline silicon varieties.

As for the latter category, companies have boosted conversion efficiency of poly- and monocrystalline modules to 16.5 to 16.8 percent and 17.8 percent, respectively. This is thanks to advancements in slicing technology, which enable makers to turn out solar cells 50 to 100 microns wide. Earlier methods yielded 180-micron cuts. In the next two or three years, conversion ratings for monocrystalline panels are expected to reach 18 or 19 percent.

Meanwhile, China makers of wind-solar power systems foresee a 20 percent increase in exports this year as they expand markets.

Currently, sets priced at $250 to $400 are equipped with a 200 to 400W wind turbine and a 50 to 100W solar panel. Select models boast light sensors and time controls. Others are fitted with LEDs, furthering the line’s environment-friendly appeal.

The latest releases adopt five-blade wind turbines that produce 60 percent more energy annually than three-blade versions. Such types have lower rotation speed to prevent malfunctions caused by overspeeding and decrease noise.

Note: This article "China suppliers go 'green' to counter energy shortage" was originally published by Global Sources, a leading business-to- business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.

All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.

Disclaimer: All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. We, our affiliates, and our affiliates' respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party.

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