Jiangsu province

Despite a weak foundation in solar energy use, Jiangsu province, which is home to many solar industry giants in China, is still regarded by many as a wonderland for future solar cities in China.

As the world's largest solar PV manufacturer, China produced half of the world's new installations in 2010, nearly 60 percent of which were made in Jiangsu province, East China, according to Jiangsu PV Industry Association.

Emerging in 1998, the solar industry has grown into one of Jiangsu's pillar industries. About 600 to 700 companies are involved in Jiangsu's fully developed solar PV supply chain, the association says.

The rapid development of global solar PV markets in 2010 pushed Jiangsu's solar PV industry to the next level. The output value of its solar industry jumped to 170 billion yuan, increasing 89 percent compared with that of the previous year.

Suntech Power, based in Jiangsu's Wuxi city, beat US-based First Solar to take global top spot in shipments since 2010. Besides Suntech Power, six out of the top 15 solar PV producers in the world are from Jiangsu province, the association says.

However, like other players in China's solar manufacturing industry, what Jiangsu wants to downplay is the fact that 95 percent of the solar PV produced in China goes to the overseas market.

China Electronic Equipment Group (CEEG), also a big name in Jiangsu's PV industry, sold 90 percent of its products to the overseas market in 2010, which brought in a dramatic growth in sales.

"We sold 7 billion yuan of solar PV in 2010, thanks to the growth of European markets," says Chen Lianghui, marketing director of CEEG.

Chen says that the overseas market remains his company's emphasis in 2011. "The demand in Europe may drop this year due to the decrease in government subsidies, but we think the market in Africa and Middle East will likely grow in big steps in the near future," he says.

Both Wuxi, where Suntech Power is located, and Changzhou, where Trina Solar is based, claim to be building solar cities, but their focus is on solar PV production, rather than the use of solar-generated power.

Many experts have urged Jiangsu to explore the domestic market because an industry that relies heavily on exports can be very fragile.

However, Wei Qidong, secretary-general with the Jiangsu PV Industry Association, says it is impossible for Chinese PV manufacturers to shift their focus to domestic markets for now as their products can sell at better prices in overseas markets.

"And the size of domestic market is so small, compared with the increasing production capacity of Chinese solar PV producers," he says.

The seemingly promising future of the global solar energy market has helped fuel explosive expansion in PV production capacities in Jiangsu. CSI Solar Technologies in Suzhou city doubled its production capacity in 2010 and so did Eging PV in Changzhou city.

China is set to have a total solar power installation capacity of 20 gW by 2020. Jiangsu province alone produced 5 gW in 2010.

Despite the growing concerns on oversupply, Meng Xiangan, vice-chairman of the China Renewable Energy Association, expressed his faith in Jiangsu's solar PV industry and the use of solar technology in the province.

Eastern areas in China such as Jiangsu may not enjoy enough sunlight, compared with those cities in western China.

But the more developed coastal cities in the east consume much more power, which will create a huge demand for clean energy in the future with government stepping up efforts to cut back on greenhouse gas emission, Meng says.

"High prices form the main obstacle in the use of solar power in ordinary households," he says.

"But where there is a demand, there is a market."

The large number of PV manufacturers in Jiangsu will lead to fierce competition, Meng says.

"In order to win more market share, they will work harder to upgrade technology and cut down production costs, which will eventually lower the price of solar energy."