A renewable energy project in which the World Bank and the Global Environment
Facility (GEF) provided $13 million and $27 million respectively, as well as technical assistance,
supported a successful initiative led by China to build a market for solar photovoltaic and wind
energy technologies almost from scratch.
The World Bank-supported renewable energy development program has enabled sales
of over 402,000 PV solar-home systems (SHS) to rural families in remote areas of West and
North-West China. About 1.6 million people who live in tents at least part of the year and
who previously had little access to electricity, now have better light, communications and
entertainment, with portable systems made to fit their semi-nomadic lifestyle.
The program supported China’s initiative to promote rapid growth of the PV industry,
and helped improve quality of production while keeping costs low. Technical standards for PV
components in China built on standards applied in other Bank and GEF-sponsored projects in
Indonesia and Sri Lanka. The market for solar home systems rapidly expanded, and a network
of suppliers, wholesalers and retailers was fostered. PV systems, concentrated initially on
households, are now powering schools, health centers, village satellite telephones, forest
protection, road maintenance, climate monitoring and Buddhist temples.
The Chinese government provided matching grants to PV companies eager to improve
their business and marketing practices and improve the technical quality of their products. By
the end of 2007, 34 participating companies had received nearly 400 grants worth $2.7 million,
and matched them with their own investments. One company, Suntech (Wuxi Shangdu) received
a grant in 2002 to develop an intelligent controller for PV systems. In 2006, it was listed on the
New York Stock exchange and had placed among the world's top 10 PV cell manufacturers.
In 2004, China adopted the international standard for PV systems, required of all systems
financed by the project. By helping to upgrade the quality of PV systems made in China, the
project combined international technology advances with China’s proven low-cost production
capabilities. Improving product standards and a competitive market have reduced by half the
cost of PV systems in the country, and China has become a major exporter of world-class PV
systems to other developing countries. The China Renewable Energy Development Project was
recognized with an Ashden Award for Sustainable Energy in 2008.1