Suntech Power predicts that the cost of building large scale solar PV plants could match the cost of coal-fired generation in China by 2016, a development that will “completely transform” the energy market in the world’s second biggest economy.
Eric Luo, the CEO of Suntech Power, which last month completed a buyout by Shunfeng Photovoltaic International, says that solar PV is rapidly catching up to the cost of coal-fired generation. (China is the world’s largest consumer of coal).
“The levelised cost of generation is still coming down,” Luo told RenewEconomy in a telephone interview from his headquarters in Wuxi in China this week.
“We are not far away from the cost of production for conventional energy. We are sure that by 2016 – or at the latest 2017 – the levellised cost of solar PV will be the same as coal-fired generation in China.”
“It is going to completely transform the energy market in China,” Luo added, noting that environmental concerns would also accelerate that transformation. “China is investing a lot of money into the environment to clean up the energy production process. This is a major opportunity.”
Luo predicted that the annual installation rate of solar PV in China would top 25GW by 2020. It could even be more, should the regulations and the modeling around distributed generation be resolved. This would involve leasing and other financing. Battery storage would also have a significant impact on the solar market. “If model is right, then it (distributed generation) will be flying in China,” Luo said.