Survey of Photovoltaic Industry and Policy in Germany and China

The report analyzes the PV sectors in Germany and China, finding that while deployment support has successfully driven installations and cost reductions, investment support is insufficiently linked to innovation, and direct R&D funding remains low relative to deployment subsidies. It argues that PV costs must be reduced by another 50% to achieve large-scale competitiveness, requiring a comprehensive value-chain approach and international policy coordination to maintain momentum as German support declines.

• Building-integrated crystalline PV has the technical potential to meet 31% of electricity demand in Germany and 29% in China by 2020. If free-space installations are included, this potential rises to 71% in Germany and approximately 100% in China.
• PV power generation costs are currently more than double those of coal-fired power, assuming carbon prices of 30 Euro/t CO2. To become large-scale competitive, PV costs need to be further reduced by 50%.
• PV module prices saw significant declines between January 2008 and January 2010, dropping by 33% for German modules and 48% for Chinese modules sold in Germany.
• The industry structures in both nations feature a mix of vertically integrated manufacturers and segment specialists. China possesses higher production capacities for PV manufacturing, whereas Germany produces more of the manufacturing equipment.
• Deployment support, particularly feed-in tariffs, has been successful in both countries. However, Germany's experience shows that rapid price declines can lead to unexpectedly high deployment volumes and increased public subsidy costs, indicating a need for better adjustment mechanisms.
• Investment support for manufacturing plants in both Germany and China is not sufficiently tied to innovation or R&D criteria. In Germany, such requirements are either weak or non-existent, and in China, regional policies for manufacturing investments are not linked to R&D criteria.
• Direct R&D support is very low compared to deployment support, accounting for approximately 3% of deployment support value in Germany and 1% in China.
• Cost reductions cannot be achieved by improving a single production component; they must be pursued across the entire value chain, including ingots, wafers, cells, and modules.
• There is a growing tension between national industrial policy objectives and global cost reduction goals. Germany is concerned that its feed-in tariffs benefit Chinese manufacturers, while China is concerned about reliance on imported technology and equipment.

APA

Grau, T., Huo, M., & Neuhoff, K. (2011). Survey of Photovoltaic Industry and Policy in Germany and China. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/PV-Industry-Germany-and-China.pdf

Chicago

Grau, Thilo, Molin Huo, and Karsten Neuhoff. Survey of Photovoltaic Industry and Policy in Germany and China. Climate Policy Initiative, 2011. https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/PV-Industry-Germany-and-China.pdf.

Wikipedia

{{cite report |last1=Grau |first1=Thilo |last2=Huo |first2=Molin |last3=Neuhoff |first3=Karsten |title=Survey of Photovoltaic Industry and Policy in Germany and China |publisher=Climate Policy Initiative |date=March 2011 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/PV-Industry-Germany-and-China.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{grau2011survey, author = {Grau, Thilo and Huo, Molin and Neuhoff, Karsten}, title = {{Survey of Photovoltaic Industry and Policy in Germany and China}}, institution = {Climate Policy Initiative}, year = {2011}, month = mar, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2011/12/PV-Industry-Germany-and-China.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }