Bright prospects? China's rooftop solar goal looks too ambitious

Thu Feb 27, 2014 4:21pm EST
 
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By Charlie Zhu and Swetha Gopinath

(Reuters) - Beijing's goal of tripling solar power from small-scale operations such as rooftop panels looks overly ambitious, risking disappointment for investors who have bid up shares in Chinese solar panel makers in the past year.

China has a target of installing 14.5 gigawatts (GW) of solar generating capacity this year - close to Finland's entire power capacity.

Of that, it expects 8GW from so-called distributed solar, which includes rooftop panels and other small installations. The aim is to redress an imbalance caused by a glut of large solar farms in China's vast western region, where there is plenty of sunshine but not enough infrastructure to harness and transmit the power to the densely populated south and east.

But unless China promises bigger subsidies and financing support, and streamlines the process of acquiring rooftop rights, companies say the rooftop installations just aren't worth it.

"The economics of distributed solar are in doubt," said Wang Xiangfu, chief executive of Hong Kong-listed solar panel maker and solar power developer Shunfeng Photovoltaic International Ltd. "The goal is very difficult to achieve unless the state raises subsidy," said Wang, echoing the view of officials at numerous major Chinese solar makers and developers interviewed by Reuters over the past few weeks.

Even state-run media have cast doubt on the government's projections for distributed solar.

China Energy News, which is published by the People's Daily - the flagship newspaper of the Communist Party - on Sunday quoted industry experts as saying that it would be "difficult" to realize the plan due to a series of challenges, from unattractive returns to the quality of many rooftops in China.

U.S.-listed Yingli Green Energy, whose shares have doubled in the past year, said its focus remained on solar farms even though it announced in January that it had partnered with China National Nuclear Corp to develop 500 megawatts (MW) of distributed solar in China.   Continued...

 
Solar panels are seen on the roofs of residential houses in Qingnan village of Lianyungang, Jiangsu province January 8, 2014. REUTERS/Stringer