China, blighted by pollution, is looking to dominate the high-end of a major growth market: solar power.
Under a new programme, China is pushing the industry to mass market high-performance solar cells so far used mainly in hi-tech products like satellites.
Making these cells more affordable will probably boost a sector that has already disrupted global electricity generation.
It will also put pressure on international solar cell makers such as Canadian Solar, REC Solar, Sharp and Sunpower, which compete with Chinese leaders including LONGi Green Energy Technology, Trina Solar and JA Solar Holdings.
Under its 2017 “Top Runner Programme”, China’s National Energy Administration plans to add 8-10 gigawatts of solar capacity to its existing 80GW.
“This shift could have far-reaching implications for the global solar industry, especially vaulting China into the top ranks of countries pursuing solar R&D,” Stanford University said in its 2017 report on the solar industry.
World solar power generation capacity has ballooned to around 300GW from just 1GW in 2000, according to International Renewable Energy Agency data, and is set to double again by 2020.
That growth has largely relied on multicrystalline silicon photovoltaic (PV) cells - sometimes called polycrystalline - in which solar units consist of multiple silicon crystallines.
These have been cheaper to produce than the more efficient monocrystalline cells, which are made from single crystalline units.
The price of multicrystalline cells has dropped to well below 50 cents a watt from $80 (R1 000) in 1980.
But prices are now converging as China scales-up production of monocrystalline cells.
Energy Trend, a consultancy, says the average price of a Chinese high-efficiency, multicrystalline cell is now $0.225 (R2.98) a watt, compared to just $0.319 (R4.23) for high-efficiency, monocrystalline cells.
“With poly-silicon products, we have seen the (development) ceiling. Now, we are ramping-up investment of mono-solar,” said Xie Tian, director of quality management at LONGi Green Energy Technology.
“Monocrystalline can take more than 50% of the market,” he said, up from around a fifth today.”
Analysts say demand for monocrystalline panels is already strong.
“Many panel makers can’t meet orders. Their bookings are full until next year,” said Jason Tsai of Energy Trend.
Monocrystalline technology is not new, but because of its cost, has mainly been used in hi-tech space products.
But its use is likely to increase as the cost differential narrows, meaning a higher efficiency can be had at a similar price.
Under the “Top Runner” programme, pay-outs known as Feed-in-Tariffs will favour high-efficiency projects.
“It’s much easier to meet the requirements on mono, therefore it (the programme) is accelerating investment in mono,” said Steve O’Neil, chief executive of REC Solar, a Singapore-based panel maker owned by Chinese state-owned ChemChina.
Germany’s Fraunhofer Institute for Solar Energy, a leader in solar development, said in July the record laboratory efficiency for mono-crystalline was 26.7% a cell, versus 21.9% for multicrystalline.
While China is driving the shift into monocrystalline, producers globally are adapting.
REC, for example, says it is starting to move into monocrystallines after focusing largely on multicrystalline cells.
“We’ve been looking into mono to further improve power output.
“In early July, we started production of a mono solar panel specifically designed for Japan’s residential market,” O’Neil said.
Solar cell development doesn’t end with monocrystalline cells, and China’s competitors aren’t sitting idle.
Fraunhofer has developed so-called multijunction cells with an efficiency of 46%, and US aerospace giant Boeing’s Spectrolab is developing cells with similar efficiency.