As countries all over the world begin pivoting towards renewable energy sources in order to reduce carbon emissions, more of investors' attention is being paid to the solar industry.
Some of the biggest bets in this sector are Chinese solar companies.
One reason: Solar itself is getting cheaper, which could lead to industry growth. Roughly a year and a half ago, photovoltaic panels cost about $3.50 a watt. Today they're less than $2 a watt, and by sometime in 2012 they're predicted to be less than $1 a watt.
But why China specifically?See why investors are going crazy for Chinese solar companies >
The solar market is headed for big time growth in 2010
CEO of Nanosolar, Inc. Martin Roscheisen (pictured at left) knew solar was on the up back in 2004. Pretty much all investors know it now. Analyst Jesse Pichel at Piper Jaffray & Co. sees 40% sales growth in 2010.
"2010 is going to be an enormous surge year," says Tom Rooney, CEO of SPG Solar. "We may do two, three, four times as much work as we did in 2009."
Longer term, as the cost of solar power approaches that of coal and natural gas, look for the industry to shoot up dramatically.
Chinese government subsidies
Last July, the Chinese government stated it would subsidize 50% of investments for solar power projects. Between now and 2015, the administration plans to more than double its “environmental protection” spending to as much as $454 billion. This will result in mandates for using renewable energy generation sources, including solar.
China wants to dominate solar (like they already dominate the global wind turbine market)
The Chinese government is overwhelmingly supporting the growth and creation of the chinese solar industry.
"That's going to be their market. That's how they feel about it," says CEO of SPG Solar Tom Rooney. "They've put a very, very high priority on winning the race for global leadership on solar."
Manufacturing costs are low in China...
They're so low that European and Japanese suppliers can't compete with the low cost of Chinese products
READ the rest: See why investors are going crazy for Chinese solar companies >
Disclosure: No Positions