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Does the Strength of Chinese Manufacturers Create the Feed-In Tariffs Pointless?


Regrettably the solar industry isn't a level playing field currently. The Chinese government has offered some enormous loans to their high PV manufacturers. These manufacturers are using the money for incredibly rapid expansion so they are quickly outgrowing all of their European rivals. Being bigger means they have greater efficacy, so the large Chinese players now have even lower prices than their foreign rivals. The situation has led German policy makers to consider protectionist policies for solar though ('purchase German') and provided fuel for its anti-solar lobby.

All that apart, the top-tier Chinese solar manufacturers are now producing top quality modules with lesser prices compared to anybody else. They've had a lot of experience with due diligence from European banks and are now pro-active in regard to quality management and bankability. They're also starting to invest heavily in R&D which will shut the already small technology gap with Japanese and European competition. Chinese solar manufacturers are integrating downhill in the value chain in a large way. This means that for example cell manufacturers are beginning to make wafers, silicon and modules etc.. This gives them greater capacity to control quality and enhances margin retention. This decreases the'fear factor' of working with Chinese businesses and taking revenue away from European wholesalers. The potency of the big Chinese players is apparently putting a strain on its own competitors. If one had to choose between German or Chinese manufacturers as the most likely to be around in 25 years it'd almost surely be the Chinese.

It must be noted that there a number of China manufacturing companies that don't have such high criteria and should be prevented. Lots of men and women in the solar industry are not convinced that the UK's Microgeneration Certification Scheme is effective at weeding out these poor manufactures judging from the firms which have obtained through. Additionally, there are lots of counterfeit modules on the market now (such as fake Trina Solar and ET Solar modules are widespread) therefore its important to locate installers with good assessing procedures.

So does the rise of the big Chinese solar manufacturers harm the UK and make the Feed-in tariffs moot, seeing as it'll support the continued growth of unbeatable overseas competition? I would argue that the only way to create growth in our manufacturing business is to create a national end-user sector. For quite a while that the UK has precious little in terms of PV manufacturing capability, meaning that the strength of Chinese firms has little impact on people. If we were not buying from China, we'd be purchasing from elsewhere. As the UK market grows, more people become engaged in the business and begin to look at product creation. Already there are a range of UK companies creating solar products specific to the UK market as a direct effect of the introduction of the Feed-in tariff.

Furthermore, module manufacturing makes up just a small section of the solar value chain. Installing roof-top PV is highly labour intensive, and the feed-in tariffs will create a huge number of jobs in the badly affected building services sector. The simple fact that there are good quality, cheap Chinese panels accessible allows solar PV to become competitive as a renewable energy source. Costs are expected to fall rapidly over the forthcoming years (as they have already) meaning in around 5-6 years time the cost of solar power will likely be at par with retail power costs, which means the FiTs won't be needed anymore.

Another point is that the large Chinese PV manufacturers will start doing the previous manufacturing measure, module integration, even close to their markets. This is only because you can air cargo solar cells, however, you have to ship completed solar panels due to the glass (routine glass factories generally just serve a radius of 100km). By doing module integration near their key markets, most manufacturers won't have operating capital tied up for 4 weeks and will reduce the danger of damage in transportation. Sharp already do this using a module integration plant in Wrexham, and we may well start seeing the Chinese companies open manufacturing plants in Europe, even in the united kingdom, over the next couple of years which would provide an intriguing boost to UK industry.

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