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China tipped to double its solar capacity target to 10GW by 2015

China is doubling its target for solar generating capacity to 10GW by 2015, according to reports in the country.

The target upgrade has been rumoured for some time. Influential financial daily the China Securities Journal cites an unnamed official saying that the revised target has been submitted to China’s State Council, as part of the renewable energy development proposal for the 12th Five-Year Plan.

The news boosted share prices of China's mainland-listed solar companies such as Shanghai Chaori Solar Energy.

While not yet approved, the target – double the original draft goal of 5GW - is expected to become official soon, says Wang Sicheng, a senior researcher on solar energy at the National Development and Reform Commission, China’s top policy-making body.

Local media reports also suggest that China’s 2020 solar target will be increased from 20GW to 50GW.

Wang tells Recharge that the 2015 target is being modified in response to concerns about nuclear power following the Japanese earthquake in March.

The disaster unfolded midway through the annual meeting of China’s parliament, the People’s Congress, spurring delegates to make their views known to the National Energy Administration.

However, Wang notes that the target will be difficult to reach without financial incentives to spur market development.

“There are still big barriers. There is no standardised feed-in tariff and grid connection is a big problem without a standard policy,” Wang says.

China’s solar companies nonetheless say they expect growth to remain relatively strong in their home market.

Suntech, Yingli and Hanwha SolarOne all reported higher shipments in the first quarter of 2011 than the previous year.

Total shipments to the market are expected to reach 1GW this year, compared with about half of that figure for 2010. Yet most modules go to government-backed projects under initiatives such as the Golden Sun programme.

“All other markets are driven by incentive. A feed-in-tariff for China is long-awaited, though with module prices coming down so rapidly, it’s probably in [the government's] interest to wait until these stabilise,” says Paul Combs, investor relations director at Hanwha SolarOne.

The Shanghai-based company estimates the Chinese market to account for 2-3GW within five years rather than the targeted 10GW.

Average selling prices in China tend to be “slightly lower” than other markets, Suntech chairman Zhengrong Shi told analysts in an earnings call last week.

Despite this, the Chinese market believes that with the country's enormous energy needs and well-documented environmental issues, as well as a large indigenous industry, a government support programme will come eventually.