Workers from the State Grid Corporation of China install a solar photovoltaic power generation system on a roof of the first intelligent substation in Huaibei, Anhui province. [Photo / China Daily]

By 2050, one-third of energy will come from PV solar facilities

More than 200 people gathered in a big, bright, green-themed factory in Xi'an looking for signs of "spring" in China's photovoltaic solar industry, which is experiencing its coldest "winter".

The audience, including PV executives from foreign and Chinese companies, industry experts and government officials, were attending an "Innovation Summit" that aims to send an important signal: When times are bad, that's when it's time to spend on new technology to prepare for the good times to come.

Charles Gay, vice-president of American Applied Materials Inc, one of the world's largest PV equipment suppliers by sales, got the most attention during the conference because of his speech on the energy and solar industry called "A Vision of the Future".

He said solar energy is the only renewable resource that has enough potential to satisfy the world's carbon-free supply goals.

Charles Gay, vice-president of American Applied Materials Inc

Finding the answer is a little tough for Chinese solar companies.

Gloomy industry

Revenue for China's PV solar industry grew 31 percent in 2011, well below previous years' growth rates that sometimes saw industry revenue double or even triple.

Profit margins on module components also contracted as prices fell, a huge burden on the producers, who ship more than 90 percent of their output to Europe and the United States, according to Haitong Securities.

US anti-dumping and anti-subsidy investigations further worsened the situation.

"The two cases will damage China's PV solar industry hugely," said Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission.

"China helped the US industry more than it hurt," said Gay. "China has created thousands of jobs in the US and helped America to get solar energy more easily."

He said without China, it would be hard for the global PV industry to have reached its current scale.

"In addition, competition always helps to improve" an industry, he added.

Although Chinese companies have gained support from many of their US and European industrial partners, the reality is harsh.

In the first quarter, the revenue of the industry dropped 33 percent in China and net profit fell by 99 percent.

However, Haitong Securities warned that it is still hard to predict when the good times will come.

New path

"When our customers sneeze, we catch a cold," said Mark Pinto, executive vice-president and general manager of energy and environment solutions at Applied Materials.

Analysts said many PV solar producers stopped or reduced production, so equipment suppliers such as Applied Materials get fewer orders.

Q+A: Charles Gay