Chinese solar manufacturers eying Africa wary of economic and political challenges in the region

By Editor


Chinese solar manufacturers eying Africa wary of economic and political challenges in the region

Greentech Lead Africa: Following the recent tax rules
imposed by the U.S and European Union, Chinese solar firms are now searching
for new horizons; and undoubtedly Africa is becoming one of their hot choices.

While Africa is emerging as a big solar market thanks to
the climate and geography of the country, solar panel manufacturers are still
wary of the economic and political uncertainties prevailing in the continent.

The sentiment was felt in the recently concluded
Photovoltaic (PV) Summit 2012 Africa in Beijing. The summit was attended by
leaders from around 20 domestic major solar companies, officials from 16
African embassies in China, and some experts from the solar energy sector.

Gogu Alfred A. Saame, Ghana’s ambassador to China, said
the government is welcoming Chinese manufacturers and has released policies subsidizing
the usage of new energy.

ReneSola, a Chinese solar maker, is one of the Chinese
solar makers who have announced plans to open manufacturing facility in South

However, most Chinese companies are not sure whether they
will be able to survive in this new market. Africa is not a familiar market to
most of them, and they are encouraged by the fact that the climate conditions
are perfect for a wide scale solar deployment.

Some of the serious challenges these companies facing in
the continent will be lack of skilled labor and the high cost of production.
 Many manufacturers are doubtful whether Africans will be able to afford
the solar power which is much costlier than conventional sources.  Lack of
financing is another challenge facing the industry.

Chinese solar makers are, however, left with no option
but turn to markets like Africa and India in order to compete globally and
retain their leadership in solar industry. Following the recent anti-dumping
and anti-subsidies actions by the Western governments, most of China’s domestic
solar makers have cut down production and several employees have lost their

Suntech Power Holdings recently announced it will stop
two of three production shifts and reduce its workforce at its Goodyear,
Arizona, solar panel manufacturing facility. The slowdown in production is due
to global oversupply and higher production costs related to recent import
tariffs imposed by the U.S. government, the company said.

According to experts, Africa has huge growth potential in
solar energy. Recently a report from Frost & Sullivan suggested renewable
energy market especially solar and wind in East Africa is poised for
significant growth. Incentive policies, in the form of feed-in-tariffs, have
been introduced in several East African countries, which should provide the
impetus for the roll-out of renewable energy projects in the region, according
to the report.

However, Chinese firms need long-term investment plan in
order to tap markets like Africa, say experts. Currently very few Chinese solar
firms with stronger capital strength like Yingli Solar have businesses in

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