China is by far a world leader in solar power, with the photovoltaic industry in the country projecting a 30.9 percent CAGR from 2014-2019, according to new research from TechNavio.
According to a recent article from Bloomberg Businessweek:
The country has led the world in solar installations for the last two years and will likely do so again in 2015. It’s on pace to reach 33 gigawatts of solar power capacity by the end of 2014, 42 times more than it had in 2010 and more than exists in Spain, Italy, and the U.K. combined.
The cumulative installed capacity of the photovoltaic industry in China is expected to reach 102.0 GW by 2019, thanks to investments in utility-scale solar power projects— an attempt to offset the country’s huge amount of CO2 emissions.
Top Three Factors Helping China Clean Up its Act
3) Growing Environmental Concerns
Thermal power generation is the leading cause of harmful carbon dioxide emissions, and the main factor behind the extreme air pollution in China.
Because of the harmful effects of these emissions, countries like China have started investing in clean power. Photovoltaic technology has seen a huge jump in popularity, as it produces clean, renewable solar electricity from a free and nearly infinite resource. Thus, the need for clean sources of energy will drive the market over the next few years.
2) Decreased Cost of Solar Photovoltaic Technology
A decline in solar photovoltaic prices over the past few years has resulted in the growth of the photovoltaic industry in China.
In the past decade, solar manufacturing costs declined by more than 70 percent—a drop that can be attributed to efficiency improvements, better economies of scale, and more efficient production processes with improved supply chain management. Many vendors have lowered their prices to increase demand for their products, which has led to strong overall growth for the market.
1) Increase in Government Support
The main factor spurring growth in the Photovoltaic Industry in China is impressive subsidies from the Chinese government and programs supporting the solar industry, such as Golden Sun and Rooftop Solar. These programs are designed to encourage investment in technologies related to solar photovoltaic production and installations, which has encouraged investors to contribute to solar projects, and resulted in an increase in the number of installations.
And these tax incentives haven’t just contributed to significant growth in the number of photovoltaic installations—they will also determine the growth of distributed photovoltaic power and thin film technology. This kind of support is essential for the solar industry to increase the number of users and achieve economies of scale.
National authorities are encouraging companies to manufacture photovoltaic modules at lower prices by providing subsidies through financing, tax redemptions, and R&D support, and China led global investment in the solar industry during the third quarter of 2014.
Private companies such as Anwell, Hanergy, and Hareon Solar have many photovoltaic projects in the pipeline and are expected to pump billions of dollars into the industry to take full advantage of the conducive environment and regulatory policies in China.
