China's Qiangsheng Photovoltaic Technology Co, or QS Solar, is confident it could lower the cost of solar power generation to 0.65 yuan (9.50 US cents) per kilowatt-hour in two and a half years through improvements in scale and its low-cost thin-film technology.

A solar power station being constructed in Wuxi, Jiangsu Province [CFP]

That would make it possible for solar generation costs to be close to on-grid coal-fired power prices which average 0.38 yuan per kwh nationwide.

The generation cost forecast is based on a target production cost for the company's solar cell modules of 50 US cents per watt in 2011, against 90 US cents for this year, said Sha Xiaolin, chairman of the company.

Sha said taking into account a government subsidy and that historically electricity prices have been increasing he is optimistic large-scale use of the clean energy is only a matter of time.

A solar power station in Spain [CFP]

Unlike most firms in the solar cell industry which use polysilicon as a key material, QS Solar adopts a more advanced thin-film technology.

The Chinese government last month unveiled a generous subsidy program for solar projects that are integrated to buildings. This could bring solar generating costs down to about 1 yuan per kwh, only a quarter of the on-grid price for some pilot solar projects approved last year.

Sha believes the subsidy is a boost to QS Solar as thin-film panels are lighter and more pleasing to the eye because of its smooth surface.

QS Solar, operating a 100-megawatt-a-year plant in Nantong, Jiangsu Province which costs about US$70 million, aims to boost capacity to 500 megawatts by the end of next year by adding new lines in its new Suzhou plant.

To fund the growth, Sha said QS Solar is still eyeing a stock market listing in the second half of next year.

(Shanghai Daily April 16, 2009)