Solar markets: China

China will continue to manifest its dominant role as the world's solar factory and solar manufacturers, particularly from Europe, the USA, and Australia, will have to continue to recourse to Chinese producers if they want to survive in a price-competitive solar market. Observations of the Chinese solar PV markets have shown that the comparably low costs of production increasingly couple with technological reliability and efficiency. Solar made in China is less and less becoming a qualitative risk but rather an opportunity to do solar PV investments at reasonable prices. Having felt the high demand for cost-effective inverters, batteries, and other components in 2010, the Chinese solar PV industry began to expand in 2010 out of the shadow of the world financial crisis. In 2011, the expanded production of Chinese PV companies is expected to result in an excess capacity situation which will lead to a decrease in prices but also in the decline of the profit margin up to 20%. Due to the decreasing demand from Europe, the demand side will be very advantageous while Chinese suppliers will be fiercely competing for clients in 2011. The current heavy dependence of the Chinese solar industry on exports will, following the declining demand from Europe, be shifting towards more investments in technological innovations and quality improvement. The Chinese government will be increasing investments in its solar sector, not only in order to save the many export-dependent domestic solar companies but also in order to use the vast potential of the country and decrease China's overall oil, gas, and coal dependency. In 2011, solar water heater appliances for the countryside have been a major trend in China and many PV companies have gradually shifted their attention from the urban market to the still underserved but potential rural market.