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Solar in the Asia Pacific Region Booms: China's 2011 Installs May Surpass America's for the First Time

With European solar markets in decline, the industry is looking to the next hot solar region. Even with political troubles in the U.S., companies still see America as a good long-term bet. (And let's remember, Europe's slowdown doesn't mean the region is going to stop being a major player.)

But analysts now see the Asia Pacific solar market as the Next Big Thing, driven largely by growing domestic demand in China. For the first time this year, China may surpass the U.S. market, according to analysis from NDP Solarbuzz. Historically, that country has been a supplier of solar technologies, not an installer. But that trend is shifting.

Most of the growth — particularly in the second half of 2011 — is being driven by China and India. These countries hold the most promise due to their sheer size. But they are also very immature markets, with major regulatory hurdles and a limited downstream installation network, explains SolarBuzz:

“As the European markets no longer present certain growth, the Asia Pacific markets are increasingly the focus of international companies looking to expand. Companies seeking to take a share of this growth still face significant hurdles to define strategies to successfully access the downstream value chain,” said NPD Solarbuzz analyst Christopher Sunsong. “These challenges, though, are unlikely to deter their determination to participate given the potential of this new regional market opportunity.”

This comes as Ernst and Young has issued its latest Country Attractiveness Indices report, which tracks the top countries for clean energy investors. China came in number one, with the U.S. coming in at number two. While many developed countries will continue to lead, Ernst and Young calls attention to the rapidly tipping scales:

Gil Forer, Ernst & Young’s Global Cleantech Leader, explains, “the mature renewable energy markets of Western Europe and the U.S. have been hit by a perfect storm of reduced government incentives, restricted access to capital, and increased competition from abroad.

“At the same time we are seeing growing support for renewable energy in emerging markets. Such countries, with a strongly growing energy demand, are seizing this opportunity to leap-frog fossil fuel generation to secure a low carbon and resource efficient future in renewable energy, with 15 emerging markets being added to the CAI in the past two years.”

In the Asia Pacific region, the solar market is expected to grow around 130 percent this year, with China representing 45 percent of total demand.

This article was originally published by Climate Progress and was reprinted with permission.

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