China's wind power industry is facing bottleneck issues that may shake its leading position, despite having the world's largest installed wind turbine capacity.

China increased its total wind power capacity to 41.8 gigawatts (gW) in 2010, up 16 gW or 62 percent in 2010 from the previous year, according to statistics from the Chinese Renewable Energy Industries Association.

For the first time, China's newly installed wind capacity has slowed down since 2005, when the industry started taking off.

Favorable government policies have helped the industry to double the country's wind power capacity every year since 2005, as the government set a target to make renewable energy account for 10 percent of the country's energy mix by 2010.

But the target was not met, as hydro, solar and wind power combined made up a mere 9 percent of the country's energy needs at the end of 2010, according to the association.

Moreover, grid-connected capacity lags behind installed capacity by more than 30 percent, in comparison to the 10 percent gap in developed countries, undermining China's wind power efficiency and effectiveness.

"Despite the achievements in China's wind power industry, we have to face difficulties in equipment quality control, availability and power generation efficiency," said Li Junfeng, director of the association.

The greatest challenge for ambitious industry players who hope to spread their wings overseas may be quality.

Reports about equipment reliability issues broke out when Sinovel, China's largest wind turbine maker, was preparing for its listing, raising public concerns over the manufacturer's quality control.

Because of quality issues at Sinovel, China Longyuan, Asia's largest wind farm operator, reduced orders from the manufacturer.

China's wind power development will not be sustainable if equipment reliability and quality remain a concern, said Xie Changjun, general manager of Longyuan.

"The exceptional growth of China's wind power industry has sown seeds for potential risks, especially in terms of quality," said Li Yuheng, an industry analyst at China Investment Consulting, adding that the industry lacks certification and testing procedures.

The industry may see an eruption of wind turbine quality problems as time progresses and currently the operation time of Chinese turbines are not long enough to test the quality, according to a research note by China Investment Consulting.

Meanwhile, like other Chinese-made products, a price war seems to be going on in the domestic wind power market. One noticeable fact is that Chinese-made turbines cost much less than international brands.

General Electric (GE) has successfully reduced its cost to about 4,500 yuan ($684) for each kilowatt-hour while Chinese manufacturers have lowered it to below 4,000 yuan.