Due to the massive in-balance between supply and demand for solar cells, largely due to the huge manufacturing output of China, prices of PV panels have fallen to unprofitably low levels. Solyndra was the biggest and most famous of the companies to fall due to the low profit margins.
Whilst the low prices can stimulate demand, they also deter new companies from entering the market, which means fewer teams researching solar technologies; a move that could harm the promising growth both in size and efficiency that the solar industry has seen lately.
It seems that China is looking to take advantage of its huge PV cell manufacturing industry, and also attempt to readdress the balance between supply and demand, by quadrupling its 2015 solar power target.
At the end of 2011 China boasted about 3.1GW of installed solar capacity, yet the new target will see a further 21GW developed in projects across the country before 2015.
The initial 2015 target was a much more modest 5GW, with the 2020 target at 20GW, but due to the huge potential for solar power in China, and the readily available supply of PV panels, they have brought their targets forwards.
Lian Rui, a senior analyst for Solarbuzz, said that, “with a significant tumble in photovoltaic prices, the timetable for mass use is ahead of time. The new target is still very conservative; we expect the installation to surpass 30 gigawatts.”
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com