suntech_logo.gifChina's Suntech Power hopes to take advantage of the brighter prospects for solar energy in the US by building a factory stateside to service the US market.

Producing solar panels in the US would “drastically” reduce logistics issues and costs, Suntech argues, as its panels are mainly produced in China and so have to be transported to the US. Building them closer to the final market would also reduce carbon emissions associated with transport and, to Suntech's eyes, makes a green energy source even greener.

manufacturing team has created a pilot line to develop low cost, proprietary processes that can be replicated in key countries outside of China, including the US.

Alongside US-listed Suntech, several European and Asian companies are also expanding their production in the US to take advantage of the new political impetus for green energy.

But it is the Chinese players that have the traditional solar energy companies of Europe and Japan most worried. Suntech claims to be the world's largest manufacturer of photovoltaic modules and it has moved quickly to establish a bridgehead in the US. It recently was chosen to build and operate a 30MW solar plant in Austin, Texas, for example.

In a report on the global solar market, Frost & Sullivan argues that falling polysilicon and solar module prices have the potential to cement China's role as a solar manufacturing hub and challenge the supremacy of Europe and Japan.

The Chinese industry is forcing the rest of the world to reduce manufacturing costs. As has happened in so many other manufacturing sectors, other countries have been caught off guard by the speed with which Chinese firms have mastered the technology and optimised processes to churn out solar modules at the lowest cost.

Thanks to the new Obama administration, the US is now prepared to give a big boost to solar energy, but it looks like Chinese manufacturers could take the lion's share of the business.

Europe, specifically Germany, has traditionally been by far the most important player and manufacturing hub in the global solar market. But its position has recently started to weaken as other countries have been gaining a stronger momentum in the solar energy business, says Frost & Sullivan

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