Solar Panel Industry in China

China’s solar panel industry has become the world’s biggest thanks to a simple formula; Produce in China, sell in Europe. Benefiting from generous financial backing at home, which the U.S. Department of Energy says amounted to $30 billion in state support in 2010, Chinese manufacturers have spent years boosting capacity. Since the domestic market for buying and installing solar power systems was small, the Chinese focused on exports, especially to Germany and other European countries where subsidies helped fuel demand for panels.
Given Europe’s debt crisis, the Continent is losing its appetite for solar subsidies that benefit China. The U.S. market isn’t promising either. Mainland companies are looking for alternatives as well. The Chinese government has started spending more money to make solar power more affordable.
For years, solar took a back seat to wind as China’s preferred form of renewable energy. Solar was less efficient and cost about four times as much per kilowatt hour of production. As raw materials costs for panels have fallen, that gap has narrowed. Today, producing a kilowatt hour of solar power costs about 17¢ vs. 12¢ for wind, and prices are falling fast.