$6bn Empire of the Sun

Sunday Mail Adelaide
Sunday 3/2/2008 Page: 74

SOLAR power will be cheaper than coal or oil-powered electricity within five years, China's "Sun King" believes. Dr Zhengrong Shi, an Australian citizen who catapulted from suburban obscurity to become mainland China's richest man, will outline his glowing forecast for solar energy in Adelaide next month at the International Solar Cities Congress.

In a rare interview, Dr Shi told the Sunday Mail how solar power is poised to dramatically fall in cost, how the world will switch to sun power within a generation - and how he proudly flies an Australian flag outside the Chinese headquarters of his solar cell manufacturing plant. "By 2050 about 35 per cent of world electricity will be solar generated, and by the end of the century it will be more than. +' 75 per cent," he said. "I would say within three to five years the cost of generating solar powered electricity will fall to 15c per kilowatt hour." In Australia, electricity from fossil fuel powered sources now costs up to 20c per kilowatt hour, while solar photovoltaic costs around 50c.

The forecast of such a dramatic fall in cost comes amid growing pressure to switch to cleaner energy due to climate change, and as developing nations' appetite for power grows. Dr Shi, 44, is well placed to make predictions about the future of solar energy. He arrived in Australia from China with a master's degree in laser physics in 1988, then began work in a solar research laboratory at the University of New South Wales. He became an Australian citizen as the laboratory's work won international accolades - the lab's Professor Martin Green and Professor Stuart Wenham won the Australia Prize in 1999 for their research.

The high cost of silicon in photovoltaic solar cells, which convert sunlight to electricity, has been a major obstacle to the widespread use of solar power. Dr Shi was part of the team that developed a new generation of silicon wafer cells, significantly reducing the cost. The Chinese Government kept a close eye on its prodigal son, finally wooing him back to set up a solar company in Wuxi, near Shanghai, with a $6.7 million grant. The US Government also tried to lure him.

China's gain was Australia's loss. In 2001, Dr Shi set up solar manufacturing and research firm SunTech Power Holdings, picking up cheap equipment from a bankrupt US firm, and within a few years became China's largest manufacturer of electricity producing solar cells. (He did not use the technology he helped develop in Sydney, as that was protected by patent). He floated the company on the New York Stock Exchange in 2005 - and a year later Forbes magazine named him as mainland China's richest man and Australia's fourth richest citizen, with a paper fortune of almost $3 billion.

While $3 billion sounds a lot, if his optimistic predictions for solar's future are correct he will soon be making some serious money. "I have been fortunate to be in the right place at the right time," he said in a telephone interview from his Wuxi headquarters. "The industry is booming; European nations in particular are switching to solar. In terms of sales, solar has surpassed wind-generated power. "We have pollution and greenhouse gases as a result of burning fossil fuels, leading to climate change, and this is driving the demand for solar energy." While European nations look for clean power, Dr Shi noted developing nations would be demanding massive amounts of energy in coming years.

"We are facing an energy resources crisis," he said. "I'll be telling the Solar Cities Congress that more than half the population on Earth are just starting to improve their lifestyles - where will all the energy they demand come from?" While demand rises, Dr Shi predicts the cost of solar energy is about to fall dramatically, likening it to the fall in computer costs. "Solar is within reach of parity of the cost of power generated from conventional sources," he said.

"In the past people have thought it was expensive but that is not the case at all. "In three to five years, based on crystalline silicon wafer technology, in places like Australia and California electricity prices from solar will be around 15c per kilowatt hour. "It is affordable. Most people don't really know about solar so it will be a new path for them. "The industry is moving very fast; it is very dynamic." Suntech's rapid expansion in China now sees it add the electricity capacity equivalent to a major power station every three years, powering military, commercial and domestic clients.

It has been boosted by a Chinese law that aims for 15 per cent of China's energy to be generated from renewable sources by 2020. As demand grows, Dr Shi is continuing his cutting edge research that now sees him hold a dozen patents for breakthroughs in photovoltaic technology. His rise has seen him dubbed the Sun King, but it has come at a price. Married with two sons, he now has a bodyguard and driver as well as the pressures of a workforce of about 5000 and thousands of shareholders in his $6 billion company.

While he misses the more relaxed Australian lifestyle - and his family miss the beach - Dr Shi is as enthusiastic as ever about the industry's future. "We are providing solutions, we have to have this attitude," he said. "And it is a good feeling to help create clean energy." That "good feeling" borders on a crusade - last year's annual office party, held in a sports stadium to accommodate the thousands of employees, included a viewing of Al Gore's environmental documentary An Inconvenient Truth. While the billionaire research scientist is keen to save the world, the fact is global warming is quite convenient for companies like Suntech, which can successfully manufacture renewable energy to wean the world off coal and oil.

Dr Shi's prediction of solar swiftly moving from the alternative fringe to the mainstream is not just based on technical innovations. silicon prices soared tenfold in recent years as a rush of demand took producers by surprise. Dr Shi believes the price of silicon will fall dramatically over the next two years as production increases, cutting costs at the same time as the efficiency of solar cells improves. These changes will see solar able to compete with traditional energy sources on the key factor of cost.

He also believes Australia can still take a leadership role in developing solar technology, pointing to the ground-breaking work that continues to be done at the University of New South Wales. However, he notes the incentives and support that lured him to China do not appear to be available for anyone wanting to create a solar kingdom in Australia.

THE Sun King's rise in turning $6 million in seed capital into a $6 billion company has not been driven by ambition or greed. When he first arrived in Australia he had no interest in photovoltaic research - he simply wanted to find a way to stay in Australia. Then, after discovering his knack for the field, he felt let down when the breakthrough technology he helped develop at the University of New South Wales failed to be commercialised. Indeed, not long before he received the offer from the Chinese Government he was considering quitting research to set up a restaurant in Sydney. Instead, he went back to China and started an empire of the sun.

As well as being a keynote speaker at the International Solar Cities Congress, Dr Shi intends to use the trip to build contacts with a view to developing business relationships with South Australia, where Suntech products are already sold. The billionaire scientist has the knowledge and technology; South Australia has the demand and the sunshine - it could be the start of a beautiful relationship.