China solar market could rival U.S. in 2011-report

Mon Nov 7, 2011 3:31pm EST

* Solarbuzz puts China nonresidential market at 2.8 GW

* Seen helping build market for Chinese manufacturers

By Matt Daily

Nov 7 (Reuters) - New subsidies implemented by Beijing and fast-declining prices for solar panels could put China on pace to match the United States's additions of the renewable energy source this year, acccording to a report issued on Monday by consultancy Solarbuzz.

China is likely to install 1.8 gigawatts of solar panels on nonresidential sites this year, Solarbuzz said in new report, in line with forecasts for the United States, which was the world's fourth-largest solar market last year.

Adding in residential rooftops, most analysts expect the United States to install between 2.0 and 2.2 gigawatts of solar capacity this year, more than double the 878 megawatts installed in 2010.

But China's growth is accelerating even quicker. In 2010, the country added an estimated 480 MW of solar at nonresidential sites.

One gigawatt, which is equal to 1,000 megawatts, is about the capacity of a large nuclear reactor.

Trade tensions between China and the United States have been rising in recent weeks following a complaint by some U.S. manufacturers that Chinese companies are dumping solar panels in the United States below market prices.

Earlier on Monday, China's CECEP Solar Technology Co Ltd said it had put a planned $500 million U.S. project on hold because of the trade dispute.

In August, China implemented a "feed-in-tariff" that will pay solar power makers 1.15 yuan or about 18 cents per kilowatt hour of electricity produced by the installed panels.

Previously, China had provided support to its companies mainly through through loan guarantees and other measures designed to stimulate manufacturing.

While far lower than Germany's feed-in-tariffs, Beijing's support is likely to help drive the business in China, according to Solarbuzz analyst Chris Sunsong.

China-based solar manufacturers such as Suntech Power Holdings Co Ltd , Trina Solar Ltd and Yingli Green Energy Holding Co Ltd , produce more than 60 percent of the world's solar modules, and a glut of production has helped push prices for the equipment down by about 40 percent so far this year.

Nearly all the Chinese production has been exported from the country, but its growing appetite for solar power may help its domestic producers by soaking up some of those extra supplies.

"It's certainly going to benefit Chinese producers more than anyone else," Sunsong said.

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