In addition to China being the home to low cost solar panel manufacturing, it also has a potentially huge solar project market, thanks to strong Chinese government support and a rapidly growing need for more energy in general. But if you’re an American solar panel maker, how do you break in to the market that’s already flooded with cheap Chinese solar panels and seems to hand deals to domestic suppliers more readily? According to a few deals announced on Monday morning, it’s about baby steps, like joint ventures and pilot projects.
On Monday, San Jose, Calif.-based SunPower, which makes efficient premium solar panels and trackers, announced a joint venture with silicon materials company Tianjin Zhonghuan Semiconductor, power company Inner Mongolia Power Group and development group the Hohhot Jinqiao City Development Company, to sell solar tech into the Chinese market. The $ 60 million JV focuses on SunPower’s new C7 Tracker and concentrator technology — a single axis tracker combined with rows of parabolic mirrors and 22.8 percent efficient solar cells — and SunPower is putting in $ 15 million for a 25 percent stake.
It’s a small move compared to the vast size of the Chinese solar project market. Solar watchers expected China to add 3-4 GW of solar projects this year, 10 GW of solar by 2015, and 50 MW by 2020.
And an even smaller deal was announced by an American solar maker in China on Monday, too. Arizona-based First Solar, which makes thin film solar panels, said it has come to an agreement with developer Zhenfa New Energy Science & Technology Company to sell its solar panels to a project in Xinjiang province in early 2013. This would be First Solar’s first commercial project in China.
First Solar actually signed a memorandum of understanding with the local government in Inner Mongolia for 2 GW of solar panels back in 2009 and was hoping to move that project forward last year. But regulatory approval has taken longer than expected. In the most recent quarter First Solar said it has hired Bruce Yung as its new China manager, hoping to kickstart that market.
Looks like large solar deals — like First Solar’s from back in 2009 — tend to get caught up in approval processes and market fluctuations. There was also a 2 GW solar thermal announcement from eSolar back in 2010 with Chinese power equipment maker Penglai Electric, but I haven’t heard about that deal moving forward, either. Smaller steps, working with local partners, seems to be the way to go in the uncertain Chinese solar domestic market.