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, which was recently bought out 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 levelized cost of generation is still coming down,” Luo said in a telephone interview 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 levelized cost of solar PV will be the same as coal-fired generation in China,” he said.

“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 25 gigawatts by 2020. It could even be more if the regulations and the modeling around distributed generation are resolved. This would involve leasing and other financing models. Battery storage would also have a significant impact on the solar market. “If the model is right, then [distributed generation] will be flying in China,” Luo said.

It was one of Luo's first interviews following the recapitalization of Suntech, once one of the world’s biggest and best-known solar brands, following its collapse under the weight of its debts a year ago.

Luo describes the new company as a much leaner organization. The number of managers has been reduced from 300 to fewer than 100, and the company’s focus is now on repositioning itself as an “integrated clean energy service provider.”

That is why it has recently invested in an inverter company and a battery storage developer. The company is also focusing on downstream projects, following a similar transition by other major solar manufacturers.

“We want to focus on the entire value chain,” Luo said, speaking of developing capabilities in design, engineering, manufacturing, construction, finance, insurance, operation and maintenance.

Suntech expects to quickly ramp up to its stated annualized manufacturing capacity of 2.5 gigawatts of solar modules by the end of this year -- more than its peak in 2011. This won’t bring it back to the top of the solar market, but it will regain its position among the top ten manufacturers.

Luo said Japan remained a very strong market with rapid growth for the company and that the U.S. is also promising, although Europe had declined.

Luo describes Australia, where the company has invested heavily in solar PV research projects, as one of its “traditional markets.” He said the company would focus on household and commercial-scale solar installations, but it would also be a base for an increasing presence in the Pacific islands, particularly in French Polynesia.

However, Luo said he was concerned about the anti-dumping investigation brought by Australia, at the behest of Adelaide-based Tindo Solar.

“We are very upset about it, because we don’t understand how it could happen. In Australia, there is no manufacturing of solar cells or modules. It is not like SolarWorld's [claims] in the U.S. where there is very visible manufacturing." He added, "We hope it will be amicably resolved. We still believe this is just a little...distraction.”


Editor's note: This article is reposted from RenewEconomy. Author credit goes to Giles Parkinson.