Solar in the Asia Pacific Region Booms: China’s 2011 Installs May Surpass America’s for the First Time

With European solar markets in decline, the industry is looking to the next hot solar region. Even with political troubles in the U.S., companies still see America as a good long-term bet. (And let’s remember, Europe’s slowdown doesn’t mean the region is going to stop being a major player.)

But analysts now see the Asia Pacific solar market as the Next Big Thing, driven largely by growing domestic demand in China. For the first time this year, China may surpass the U.S. market, according to analysis from NDP Solarbuzz. Historically, that country has been a supplier of solar technologies, not an installer. But that trend is shifting.

Most of the growth — particularly in the second half of 2011 — is being driven by China and India. These countries hold the most promise due to their sheer size. But they are also very immature markets, with major regulatory hurdles and a limited downstream installation network, explains SolarBuzz:

“As the European markets no longer present certain growth, the Asia Pacific markets are increasingly the focus of international companies looking to expand. Companies seeking to take a share of this growth still face significant hurdles to define strategies to successfully access the downstream value chain,” said NPD Solarbuzz analyst Christopher Sunsong. “These challenges, though, are unlikely to deter their determination to participate given the potential of this new regional market opportunity.”

This comes as Ernst and Young has issued its latest Country Attractiveness Indices report, which tracks the top countries for clean energy investors. China came in number one, with the U.S. coming in at number two. While many developed countries will continue to lead, Ernst and Young calls attention to the rapidly tipping scales:

Gil Forer, Ernst & Young’s Global Cleantech Leader, explains, “the mature renewable energy markets of Western Europe and the US have been hit by a perfect storm of reduced government incentives, restricted access to capital, and increased competition from abroad.

“At the same time we are seeing growing support for renewable energy in emerging markets. Such countries, with a strongly growing energy demand, are seizing this opportunity to leap-frog fossil fuel generation to secure a low carbon and resource efficient future in renewable energy, with 15 emerging markets being added to the CAI in the past two years.”

In the Asia Pacific region, the solar market is expected to grow around 130% this year, with China representing 45% of total demand.

7 Responses to Solar in the Asia Pacific Region Booms: China’s 2011 Installs May Surpass America’s for the First Time

  1. Mulga Mumblebrain says:

    The Chinese have stated that they intend to slowly and deliberately shift their economy to greater domestic consumption. They will do it at their own pace of course, not being a protectorate of the USA like Japan, which derailed its economy by accepting the Plaza Accord in 1985. This will be a great opportunity for others to export to China. And the Chinese will, undoubtedly, prioritise alternative energy and systems that remediate ecological destruction, because their leaders are technocrats, engineers and scientists who understand scientific facts, not tele-evangelists, financial grifters or their employees. Good to see India, despite the corruption of its avaricious elites, moving too.

  2. Merrelyn Emery says:

    Demand is high here too [Oz]. When the local govt first introduced its feed in scheme, it was oversubscribed within 48 hours and the govt had to radically revise it. Now there are many households waiting for their systems to be switched on because there are simply not enough independent certified electricians to sign off the installations, ME

  3. Mike Roddy says:

    Skilled installers isn’t the problem in India, it’s the cost of money. Rooftops are tough to justify without feedin tariffs and subsidized financing, neither of which they have. And with much lower per capita income, power is much more price driven than most places.

    India and Sri Lanka have long had a market for micro solar projects, consisting of two PV panels, a battery, converter, and wiring. Total cost: $600 (this was in 2006). Obviously, no AC, space heat, washing machines and refigerators, etc. It penciled out, because grid power is often unavailable, and homeowners accessed private sector microfinancing. India also experimented with grid solar 15 years ago, but the numbers were tougher then.

    Mulga, be careful about putting China on a pedestal compared to the US because they are run by “technocrats”. Actually, they are also Party apparatchiks, who have deep ties to the Chinese coal industry. Their structural problems, as shown in the recent huge coal deal with Australia, are similar to ours in the US. We are worse than they are, but China is hardly the model here. Sweden is the country we should emulate.

  4. Mulga Mumblebrain says:

    Mike, I have high hopes for the Chinese, and I’ll know if I’m correct, soon. If they do not move as fast as possible to de-carbonise, then they and we are stuffed. I’m sure you are correct to say that certain industries wield power behind the scenes there, but, unlike in capitalist democracies where money power buys political influence, in China a utilitarian approach based on long-term planning (which includes survival) seems to govern decision-making. I hope that I am not wrong, because I really see the Chinese as our last hope. The Swedes not so much.

  5. Merrelyn Emery says:

    Mike, technocrats is part of it but the real key is the 500+ year plan.

    So what is one of the goals of the 500+ plan – well unsuprisingly, it is a livable planet.

    Will there be ups and downs in getting there – of course.

    Will the West who can’t imagine or contemplate the day after tomorrow’s disaster or what we will do in the next blackout, or what happens after the govt changes, comprehend how China’s or any of the Asian minds work?

    No. They can’t. Forget the propoganda about Islam -the real difference we are running up against now is long versus short term planning.

    Mulga has it nailed, it’s about survival. Stay tuned, ME

  6. Philip says:

    I like the article very much. China is paying high attention of green economy. Can we repose the article on our website Thank you very much.

  7. Joe Romm says:

    Of course!