'New energy': Shining title for a traditional paradigm

Will electrics go the way of the troubled PV industry?

Since the IPO of Chinese solar panel maker Suntech Power Holdings on the NASDAQ exchange in 2005, it has been a high-speed roller coaster ride for the domestic photovoltaic industry.

That was the year Shi Zhengrong, the big boss at Suntech, became the richest man in China.

Inspired by such rapid success, the photovoltaic industry - known as PV for short - quickly became a shining star in the country, generating enormous revenues with the added bonus as a "green" concept that matched government policies.

Many cities - Golmud in Qinghai province, Suihua in Heilongjiang, Xinyu in Jiangxi, Baoding in Hebei, and Wuxi in Jiangsu - started or expanded initiatives to forge strong PV enterprises.

But PV production in China in fact consumes massive amounts of power and is among the most heavily polluting industries.

A ton of polycrystalline silicon requires 150,000 to 160,000 kWh of electrical power to make. Without electricity subsidies or other support from local governments, all PV manufacturers would run at a deficit.

Once high-flying Suntech is sliding toward bankruptcy in an industry that has been heavily subsidized and highly polluting. The author wonders if the same could be true for electric cars. [Huan Wei / for China Daily]

About 98 percent of domestic solar battery products are for export, which means a great deal of energy is used in a country whose power supplies barely meet overall demand.

Explosive growth in the PV industry has also been fueled by the extremely low cost of pollution in China.

Slide to bankruptcy

But most PV companies including LDK, Suntech and Yingli have been losing money since last year. One-time superstar Suntech is now sliding toward bankruptcy.

Its financial reports and other documents show Suntech's main business focuses on PV component manufacturing in which the company has little pricing power and no technological know-how to enter high-value businesses such as generator design and installation.

It may have the shining labels "high-tech" and "new-energy", but Suntech is just another example of a manufacturer making products with low added value.

Much like the PV industry in 2005, the new-energy vehicle industry has been embraced by enterprises and governments all over the country.

Shanghai has proposed subsidies to promote the private purchase of 20,000 new-energy vehicles at up to 100,000 each - some 2 billion yuan in total.

The Zhejiang provincial government issued special policies to promote new-energy vehicles in the province, with Hangzhou and Jinhua selected to be electric vehicle demonstration cities. Its goal is to have 30,000 electric cars on the road in three years.

Previous Page 1 2 Next Page

Previous Page 1 2 Next Page