June 3, 2009 – With its heavy dependence on fossil fuels and a coming shortage in electrical supply, China should work to utilize its burgeoning PV production for its own electrical power needs, but some hurdles need to be overcome, according to a recent report by SEMI’s PV Group.

China is in the process if building a “massive” PV industry spanning raw polysilicon to wafers to solar cells and modules — it took the world lead in 2008 with >1GW total production, and doubled that in 2008, noted Dan Martin, EVP of SEMI’s PV Group, in a statement. Meanwhile, the world’s fastest-growing country — whose GDP has consistently outpaced, by 2x or more, the worldwide GDP the past few years — still derives almost 70% of energy from fossil fuels. Increased energy demand (including from sources such as coal, hydro, and nuclear) could widen to a 6.4% shortage in electrical supply by 2010, SEMI says; this will need to be addressed by renewable energy.

Several problems are still paramount, including balancing China’s domestic solar cell ramp-up with domestic demand — 98% of PV products are exported. Other challenges include a lack of leading-edge production technology for high-purity silicon, domestic PV firms’ reliance on imported technology and equipment, and lack of funding for R&D.

“China is just now beginning to understand the global opportunities and implications of PV products and systems, and it is creating a massive PV industry representing all areas of the supply chain,” stated Martin. “It is important that China occupy a leading position in the demand for solar power, as well as contribute to global supply.”