Who is Shi Zhengrong and What Lesson Might He Have? (December 7, 2006)

    “People at all levels in China have become more aware of this environment issue and alternative energy,” said Dr. Shi. “Five years ago when I started the company people said: ‘Why do we need solar? We have a surplus of coal-powered electricity.’ Now it is different; now people realize that solar has a bright future. But it is still too expensive.”

So Shi Zhengrong (43) told New York Times columnist Thomas Friedman who was "interviewing him in his 66th-floor office in Shanghai, [where] the air was so dirty you could barely make out the skyscrapers down the street."

According to Friedman Dr Shi is the seventh-richest man in China today, with a fortune estimated by Forbes magazine at US$1.43 billion.

And he continues, "Dr. Shi is China’s leading maker of silicon photovoltaic solar cells, which convert sunlight into electricity. Yes, the seventh-richest man in China is a green entrepreneur! ...[He] thinks, as I do, that renewable clean power — wind, solar, bio-fuels — is going to be the growth industry of the 21st century, and he wants to make sure that China and his company, Suntech Power Holdings, are the leaders."

 As The Wall Street Journal put it in a recent profile, Suntech combines “first world technology and developing world prices” — so effectively it has become one of the world’s four top solar manufacturers, along with Sharp and Kyocera of Japan and BP.

Currently Dr Shi's business is 90% export based and he told Friedman, "The key... is that he uses more low-cost Chinese labor, rather than high-tech machines, to make his solar modules and handle the fragile silicon, and he takes advantage of the subsidies offered by different Chinese provinces dying for him to open a Suntech factory in their region. 'If we have a market here, we feel confident we will be a cost leader,' he says. 'Now we are at around $4 per watt. In 10 years time, I’m pretty sure we will be below $2 per watt,' which would make solar competitive and scalable."

The Chinese government has just passed a law mandating that China get 10% of its energy from renewables, like solar, by 2020. Of course it remains to be seen if they reach that goal but it wouldn't be all that surprising if they exceeded it.

What effect this push might have on Australian exports to China can give our economic modellers something more to analyse.

Credit: Energy Futures Forum - The Heat is On: The Future of Energy in Australia