Analysts are sceptical about China's claims it will more than quadruple its solar power generating capacity

China to quadruple solar power generation

China will more than quadruple its solar power generating capacity to 35GW by 2015 to ease a glut in its solar panel industry.

The target has been put forward previously by the State Grid, which manages the country's electricity distribution, but now has the official backing of the State Council, the country's cabinet and its top governing body.

The country will add about 10GW per year from 2013-2015, the State Council said in a statement,. If met, the increase in solar power generation would benefit more than just domestic panel producers such as Suntech Power Holdings and LDK Solar.

Manufacturers globally have struggled against a flood of cheap Chinese exports prompting both Europe and the US to launch anti-dumping duties against China's solar panel exports, but the council said the move would help foreign producers as well.

Analysts, however, are sceptical, citing a lack of funding for solar subsidies and the absence of infrastructure required to harness intermittent renewable energy.

"I think China can boost capacity to 21GW but it would be very difficult to reach 35GW," said Jason Cai, chief analyst at Shanghai-based consultancy Solarzoom.

China's manufacturing capacity, the world's largest, is about 45GW versus global demand of 35GW estimated for this year, industry figures show. Domestic installed solar power generating capacity stood at just 8GW at the end of 2012.

The sector has been hit hard by the excess capacity, falling government subsidies and trade disputes, and manufacturers have been haemorrhaging cash and struggling with mounting debts as panel prices fell by two-thirds over the past couple of years.

Last year the US slapped anti-dumping duties on solar cells imported from China. The EU, which accounts for half of global demand, has also imposed duties that will jump to punitive levels next month.

The State Council also urged banks to continue lending to large and efficient solar panel producers, and said it would strive to improve pricing and subsidies in order to boost solar power production and consumption, though it gave no details.

China's dominant power distributor State Grid has been holding back from purchases of electricity from wind and solar farms due in part to concerns that the intermittent sources would disrupt its networks.

It has also been struggling to transmit power from renewable energy generating centres in the north west, north and north east to population hubs in the south and east due to a lack of a comprehensive high-voltage and smart grid.

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