Made in China: Suntech has become a major supplier of solar panels worldwide, including the ones used at this massive eight-megawatt solar farm in Alamosa, CO.
To see the future of solar power, take an hour-long train ride inland from Shanghai and then a horn-blaring cab trek through the smog of Wuxi, a fast-growing Chinese city of five million. After winding through an industrial park, you will arrive at the front door of Suntech Power, a company that in the few years since its founding has become the world’s largest maker of crystalline-silicon solar panels.
Solar panels cover the entire front face of the sprawling eight-story headquarters. Nearly 2,600 two-meter-long panels form the largest grid-connected solar façade in the world. Together with an array of 1,800 smaller panels on the roof, it can generate a megawatt of power on a sunny day. It’s expected to produce over a million kilowatt-hours of electricity in a year–enough for more than 300 people in China.
In 2001, when Suntech was founded, all the solar-panel factories in China operating at full capacity would have taken six months to build enough panels for such a massive array. Suntech’s first factory, which opened in 2002, cut that time to a little more than a month. Today, the company can make that many panels in less than one 12-hour shift. By the end of this year, the workers could be done by lunchtime. Suntech’s production capacity has increased from 10 megawatts a year in 2002 to well over 1,000 megawatts today. Chinese solar manufacturing as a whole has increased its capacity from two megawatts in 2001 to over 4,000 megawatts.
That rapid growth, fueled by relentless cost cutting, has allowed Chinese manufacturers to overtake those in the United States, Japan, and Germany in less than a decade to become the biggest source of solar panels in the world. Worldwide, Chinese solar panels accounted for about half of total shipments in 2009. And that share is expected to grow this year. Of the 10 largest solar-panel manufacturers, half are based in China. In 2007, U.S. manufacturers supplied 43 percent of the panels for a solar rebate program in California. The rest came almost exclusively from Japan and Germany; only 2 percent came from China. Now Chinese companies supply 42 percent of the panels, and the U.S. share has dropped to 15 percent according to an analysis by Nathaniel Bullard of Bloomberg New Energy Finance.
In 2004, it cost about $3.20 per watt, on average, to make silicon solar panels. By now, according to solar-industry analysts at Photon Consulting in Boston, a Chinese manufacturer can make them for as little as $1.28 per watt, while the lowest-cost Western manufacturer will produce comparable technology for about $2.00 per watt. Not only has this cost advantage made Chinese manufacturers dominant in the industry, but it’s also helped redefine the prospects for solar power, pushing it closer to what insiders call “grid parity”–the point where it is just as cheap as electricity on the power grid, most of which is generated with fossil fuels. “In about five years’ time, we should be able to reach grid parity in at least 30 to 50 percent of the global market,” says Zhengrong Shi, Suntech’s founder and CEO, speaking from his spacious office looking out over the back of his company’s massive solar façade.
Face of solar: A huge façade of photovoltaic panels greets visitors at Suntech headquarters in Wuxi, China.
Suntech’s strategy so far has been to cut the cost per watt by reducing the expense of manufacturing solar panels. But reaching grid parity will also require increasing the efficiency of the panels so that each one produces more watts. Under the leadership of Shi, who was a solar researcher before he became a businessman, the company has developed a new way to make solar panels; multicrystalline modules made last year broke a 15-year-old record for efficiency in converting sunlight to electricity. A few months later, Suntech increased the efficiency mark yet again. And the company’s lab has prototypes that promise even better results. If these advances pan out, it could finally clear the way for Shi’s dream of affordable solar power.
Riches and Rags
In many ways, Shi reflects the complexity of contemporary China. Though he was born and grew up less than 100 kilometers from his factories in Wuxi, he began his career in Australia, where he lived for a decade and became a citizen before returning to China in 2000 to take advantage of the country’s economic boom. “I have to get a visa to work in China,” Shi says with a hint of an Australian accent, laughing. Despite his wealth and executive position, he has the casual but confident air of a researcher, wearing a simple sports coat and open-collar striped shirt. But his relaxed look and easygoing Australian mannerisms belie his ambition and his close connections to his native country. Several copies of magazine covers featuring him as the “Sun King” (Forbes Asia) and “China’s New King of Solar” (Fortune) are arranged carefully around his spacious office, amid citations from national