"It is time for us to rethink the old mode in developing the PV industry and reduce the export to less than 10 percent of its total output," said Li Boqiang, Director of the China Center for Energy Economics Research in Xiamen University.

A worthwhile business?

The payoff of China's investment in the PV industry is not as lucrative as some people expected.

According to Lin, the production of PV products consumes huge amounts of electricity, which is generated in coal-fired furnaces.

Fei Weiyang, an academician from the Chinese Academy of Sciences, said that for the production of polycrystalline silicon, the primary material in solar cells, as much as 2.2 million kw of electricity is consumed for every 1 megawatt output of solar cells.

"Although the utilization of solar energy significantly saves energy and cuts emissions, the problem is that China itself has not benefited from the green energy. On the contrary, it helped other countries to become greener at the cost of increasing its coal consumption," said Lin.

According to Joe Pan, a senior analyst at Sunfaith China Ltd., a Shanghai-based consulting firm, the success of solar PV in Germany has resulted in a drop in electricity prices by up to 40 percent with savings between 520 million euro ($638.6 million) and 40 million euro ($1.03 billion) for consumers.

Increases in the solar share in Germany's energy production have also caused closures of gas- and coal-fired generation plants.

In sharp contrast to more green energy in advanced countries, the pollution risk in PV production in China is rising. A fluoride discharge at the cell plant of China's PV manufacturer JinkoSolar in Zhejiang Province in August last year contaminated a local water channel, killing both aquatic products and pigs.

Jinko failed to bring the problem under control although the factory's waste disposal facilities had been failing pollution tests since April.

The production of polysilicon caused toxic substance of silicon tetrachloride and hydrogen chloride, said Meng Xiangan, Vice President of the China Renewable Energy Society.

"The recycling cost of the toxic substance is very high. Half of China's PV manufacturers have not taken any measures to recycle it," said Meng.

"Chinese PV makers are polluting their own country while exporting green products," said Fei.

China's solar industry has had to import half of its components to make solar cells. Key technologies and equipment are also imported.

Sun Guangbin, Director of the Solar Products Department with the China Chamber of Commerce, said that Japan owns 45 percent of solar energy patents worldwide, the United States 20 percent, Germany 10 percent and China only 8 percent.

Qiao Debo, a former employee of SunTech, said that at least 30 percent of the production lines in the company are imported.

"China's reliance on the import of core technology and material and export to overseas markets makes it very vulnerable and easily controlled," said Lin.

Domestic consumption

China's usage or employment of solar energy technology is miniscule.

The country installed 2.2 gigawatts of new solar capacity in 2011. That's almost 2 percent of the overall newly installed capacity, compared to 47 percent in the European Union, according to Zhang Guobao, former NEA head.

Less than 20 percent of China's PV products are used domestically, with the majority exported, said Meng.

"The domestic PV market has not been initiated," confessed Zhang.

Last July, China set a unified national benchmark price for solar power at 1.15 yuan ($0.18) per kwh, two to three times higher than the power generated from fossil fuels.

"Although the country has set a higher benchmark price for solar energy, its demand still remains low because of its high price," Wang Sicheng, an NEA analyst, told China Energy News.

"The price gap between solar electricity and thermal electricity is still high, especially in some northwestern areas such as Ningxia Hui Autonomous Region, and there should be policies to tackle this problem," said Cai Wenbin, an industry analyst at the Shanxi-based Datong Securities.

While advanced countries are achieving a PV installation boom through government subsidies and preferential policies, Chinese counterparts also call for stimulus policies regarding tax reduction and pricing of solar-generated electricity.

In 2009, China announced a national solar subsidy program, the Golden Sun Program, which provided upfront subsidies for qualified demonstrative PV projects from 2009 to 2011.

The subsidies promised in the program were not fully realized because the Central Government downsized its initial budget later, said Meng.

"Advanced countries have provided tax rebates for their PV makers, but it has never been realized in China. China's PV sector contributed at least 15 billion yuan ($2.36 billion) of tax every year. If the country can allocate 10 percent of it to support the industry, it will be a big boost," said Shi.

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