China Makes Huge Investment in Solar Panel Production

Solar panels are about to get a lot cheaper. China has invested a staggering $5.3 billion in Yingli Green Energy Holding Company so that it can expand solar panel production by leaps and bounds.

China often takes a pounding when it comes to environmental concerns and rightly so. The industrial revolution in the country has produced huge pollution problems. That being said, the country has started strongly supporting alternative fuel platforms as it recognizes it will have huge energy needs in the future that might not be met by the available oil supplies in the world.

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When it comes to solar, the country has taken a global, capitalist approach to the issue. It is trying to do with solar panels what it has done with many other products – reduce the cost by increasing the shear scale of production. The $5.3 billion investment in Yingli is estimated to increase solar panel production in the world by a staggering 100 percent. That is going to drive down prices as the surplus of inventory will more than meet any demand.

$5.3 billion is a lot to invest in any one company. In the case of China, it actually pails in comparison to other investments the country has made in solar companies. It has agreed to loan as much as $7.5 billion to Suntech Holdings and another $5 billion to Trina Solar, both Chinese solar panel production companies. Now that is putting your money where your mouth is.

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So, what does this mean for solar panel production across the world? It is a mixed bag. The news is great for consumers since prices for panel systems should fall dramatically as the new production efforts come on line. Conversely, American solar panel companies must be shaking their head since it will be difficult to compete on price with the differences in the cost of labor in each country.

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