The importance of China for our solar sector in 2015

chinese solar panelWhen we look at the year ahead for renewable energy, and try to divine the development of the Australian solar market, one of the first conclusions is the importance of neighbouring countries. I’m talking here of the continued role China plays in solar energy in Australia.

It’s not an exaggeration to say that cheap, quality solar panels from China have driven the domestic demand for solar panels in Australia. Despite wide open spaces for solar farms and abundant sun, Australia is lagging behind the rest of the world in renewable energy. We haven’t taken our rightful position as one of the leaders in the world in developing large scale renewable energy as we should.

There are a number of reasons for this. Perhaps the most obvious being government inaction, nay antipathy, towards the solar industry in favour of policies that support polluting and increasingly more costly fossil fuels. The now familiar “boom and bust” method of denying support to the solar sector which robs investors of some form of certainty in the market has become commonplace.

The misconception is that we “punch above our weight” in all issues from international diplomacy, to sporting fixtures, to energy policy. However true this may be for other areas, it lacks credibility when it comes to renewable energy and climate policy. Here we’re content to sit back and allow the world to take the lead, it appears, with the modest gains of previous governments swept aside (or at least held up in the Senate).

However the story is different on small scale solar systems.

Ordinary Aussies know when they’re on a good thing. Though support through feed-in tariffs has almost disappeared throughout the country, Australians have found that Chinese solar panels are the key to installing affordable domestic solar systems. So much so that well over a million of our households are powered by solar systems. A remarkable achievement.

However the dive down the cost curve is a two-edged sword according to some analysts. While the availability of affordable panels has driven the “ground up” Australian solar market from consumers, it has also stymied — even destroyed — the output of Australian PV manufacturers of solar panels. This is not just an Australian phenomenon. With looming trade wars over alleged protectionism from countries such as the United States, who aren’t exactly angels when it comes to subsidising their export industries to gain a competitive edge.

Many of course rightly point out the contradiction that China presents when it comes to supporting renewable energy while still being the world’s largest consumer of fossil fuels.

However while accepting this, Li Hejun, Director of the China New Energy Chamber of Commerce, and CEO of multinational clean energy company Hanergy Holding Group Innovation, wrote in a Dec 31 Financial Times article that a remarkable cost saving milestone was near at hand.

“I believe that solar will be at the forefront of this technological advance. Solar energy is fast becoming more affordable,” he said. “The cost for solar power generation is now 50 per cent lower than it was three years ago.”

“China’s cost of solar power generation has fallen to below Rmb1 per kWh and if we continue that trend, I predict that within 3-5 years the generation cost of solar cells will approach that of coal-fired power,” Mr Li added.

It is only to be presumed that these savings will be translated to other countries such as Australia who know only too well of the benefit of Chinese solar products.

So, to ask the questions we posed at the start of this article: will 2015 see an increase in the role China plays in solar energy in Australia? If so, is that a good or bad factor in the development of our renewables industry for the year and beyond? Please add your thoughts below.


  1. I suppose that it will all come down to the Chinese attitude to quality control for consumer items. Some of their everyday hardware items are made to a price and it shows. They have to apply good quality control practices and outcomes to ALL their solar panels. Otherwise they will lose market share and business reputation. Only time will tell I suppose.

  2. The greatest cost of electricity in Australia has become the cost of distribution. Around half of all power bills is network charges or fees, another quarter will be retail or billing suppliers. In China with most of the population living in apartment complexes, roof-top solar is a minor consideration for consumers, whereas in Australia the overwhelming majority of people live in individual houses. This situation obviously lends itself to solar systems owned by the consumer with no network cost. If we invest in massive solar farms, we will simply be feeding the grid and distribution system with no economic benefit to consumers at all. It just doesn’t make sense to put solar in to the grid, from a consumers point of view. With a million homes already fitted with a solar system we need to focus on getting the second million homes installed as quickly as possible. BUT, we need to work on the second phase of revising existing systems to incorporate battery storage. With the promise of new battery technology there is a potential boom in expansion of existing systems and updating them to storage capability as well.

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