Chinese glut hinders local solar cell trade

Australian
Friday 28/8/2009 Page: 7

LAVISHLY subsidised Chinese solar cells are flooding the world market and creating a glut that threatens to hamper the Rudd government's efforts to foster a solar cell industry in Australia. Under pressure from low priced Chinese solar cell exports, European and US producers are cutting production, sacking staff, reporting financial losses and looking to relocate manufacturing plants in Asia.

Some of the leading solar cell manufacturers in California have warned that low-priced Chinese cells could hurt US President Barack Obama's plans to promote the growth of renewable energy industries. This week, Zhengrong Shi, a graduate of the University of New South Wales and the head of what is becoming the world's biggest producer of solar cells, SunTech, was quoted in The New York Times as saying the company was selling solar cells into the US at below cost price to build its market share.

Last month, federal Environment Minister Peter Garrett announced that the government was providing $1.2 million towards installing a solar system at the Sydney Theatre Company as part of the "Greening the Wharf Program". Dr Shi, and his wife Vivienne, donated $2m from their family foundation towards the solar project at the STC, which utilises technology from the University of New South Wales.

In Australia, falling prices have meant federal government subsidies for solar panels have allowed customers to install solar systems virtually without cost. But solar retailers with higher priced European solar panels are running into difficulties as prices for Chinese products fall. The haste in installing before the end of the solar rebate has also led to claims that cheaper, poor-quality solar systems are being haphazardly put into place without proper connections.

Under the rebate scheme, homes, businesses and farms can install solar energy systems to offset their electricity bills and feed excess solar energyed electricity back into the national electricity grid at a premium. Canberra solar system supplier, Phil May, director of Solartec Renewables, told The Australian yesterday the solar industry had been hit by cut-price Chinese products and did not enough time to deal with demand.

"One of the problems is that the federal government was in such a hurry to create jobs for hundreds of installers, there's been a lot of substandard work done and some people have installed poor-quality systems," Mr May said. "I'm worried the solar industry in Australia is going to end up with a bloody nose and a bad name."

Mr May said some solar businesses had been "virtually railroaded into installing substandard systems just to stay in business". He said the prices of some solar panels imported from China had dropped from about $1600 to $1050 in the past few months and that some were of poor quality. Mr May said he was getting business from householders who had had solar systems installed but discovered the cheap system and installation had not covered connecting the systems to the electricity grid and the required permits had not been obtained.

Opposition environment spokesman Greg Hunt said the government had been warned about poor-quality installation of solar systems under the rebate scheme. "Reputable installers have been complaining to us about rushed jobs because of the rush to get into the scheme, when prices dropped so far you could get a solar system effectively for free," Mr Hunt said.