Some analysts believe that the focus on renewables, in particular solar, in many of the stimulus packages put forward in recent months by several Asian countries could reshape a solar industry reeling from the economic downturn.
As expected, China's stimulus package is by far the greatest, with more than $30 billion earmarked so far for renewable energy and "green" projects, including wind, hydropower, solar development and "clean coal" technologies.
Meanwhile, this year Australia has put forward $1.35 billion to finance solar projects, specifically a further $270 million for rebates for solar installations on homes, and a further $100 million to develop new solar technologies.
Other Pacific Rim states looking to renewables to knock their economies back into shape include South Korea ($2.3 billion for renewables projects) and Taiwan which plans to spend $1.3 billion on renewables in 2009.
Suchitra Sriram, an analyst with the global consulting and research firm Frost & Sullivan Ltd., said in a statement to Dow Jones Clean Technology Insight: "These economic packages have strong potential to turn around the solar-power industry in the short to medium term." Sriram considers that the new funding could lead to new demand for solar power projects and lead to a shift in demand from the traditionally strong markets of Europe and the US to Asian leading economies such as China, South Korea, India, Taiwan, and Australia.
"In China, the $440 billion stimulus package has put solar power as one of the key green-energy resources to be developed in the near future. A number of solar-power projects are already under construction throughout the country," explained Sriram. "The upcoming solar-power installations have the potential to surpass the original 2020 target of 1.8 [GW] by up to 10 times, reaching between 10 GW and 20 GW over the next 10 years."
Sriram points out that government spending is not the only factor contributing to the consolidation of the solar industry in the Far East. Because many solar companies are setting up operations in Asia to benefit from lower manufacturing costs in Asian countries, these acquisitions will create new economies of scale which, in turn, will further boost the Asian market, she said.
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