China's photovoltaic power generation costs are expected to be lower than coal burning in 2016

In a recent report, Science and Technology News highlighted the insights from the Fraunhofer Institute for Solar Energy Systems (ISE), which is part of the Fraunhofer-Gesellschaft—the largest applied research organization in Germany and Europe. The institute emphasized that solar energy in Germany is expected to become more cost-effective than coal-fired power generation in the near future. Meanwhile, Wuxi Suntech, a leading Chinese solar company, believes that by 2016, the cost of solar power generation in China could already be lower than that of coal. Once on the brink of bankruptcy, Wuxi Suntech was acquired by Shunfeng Optoelectronics and underwent a major restructuring. New CEO Eric Luo stated that the cost per kilowatt-hour for solar power continues to decline rapidly, with the most significant drop expected in 2016. By 2017, solar energy costs are projected to match those of coal-fired electricity in China, potentially reshaping the country's energy landscape. China’s ongoing battle against air pollution has also accelerated the growth of its solar market. Coal combustion has led to severe environmental issues, prompting the government to implement stricter policies, including limiting coal power expansion. Solar energy is being positioned as a key alternative to replace coal, supported by both cost advantages and favorable government policies. This combination is expected to drive rapid development in the solar sector. Luo Xin predicts that China’s annual installed solar capacity will reach 25 gigawatts by 2020. As policy and business model barriers for decentralized solar solutions like rooftop systems are gradually removed—through models such as leasing and financing—the installed capacity is likely to grow even further. He believes that with the right business strategies in place, the Chinese solar market could experience explosive growth. Suntech has also undergone significant internal changes, including streamlining its management structure, reducing staff from 300 to 100. The company has shifted its focus from just manufacturing solar panels to becoming a provider of clean energy solutions. This includes vertical integration across the supply chain, investments in solar inverters and battery storage, and efforts to develop comprehensive energy companies that cover design, manufacturing, construction, and services such as finance, insurance, and maintenance. Wuxi Suntech’s production capacity is set to resume soon, with plans to increase output to 2.5 GW by 2014—surpassing its peak in 2011. While it may not reclaim its former top position, the company aims to re-enter the top ten players in the industry. Although the European market remains sluggish, Luo Xin remains optimistic about opportunities in Japan and the U.S. In Australia, where Suntech has historically had a strong presence, recent anti-dumping investigations have created uncertainty, and the company is now cautiously monitoring the situation. The prediction that solar power will be cheaper than coal by 2016 is a positive development for China, which seeks to reduce reliance on coal and combat pollution. This shift is expected to bring structural changes to the domestic energy market. It also aligns with the findings of the Fraunhofer Institute, which suggests that globally, solar power will soon become more economical than coal. This trend could lead to major transformations not only in China but across the global energy sector.

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