Edited by Rolf Wüstenhagen and Robert Wuebker
Chapter 6: The Rise of Chinese Challenger Firms in the Global Solar Industry
Gabrielle Meersohn and Michael W. Hansen 1 INTRODUCTION In a number of industries such as electronics, advanced services, building materials, financial services, farm equipment, steel production, hotels and hospitality, contract manufacturing and so on, we see the rise of firms from emerging markets moving into markets previously dominated by western multinational corporations (MNCs). Not least in the highly dynamic and rapidly growing industries for renewable energy such as wind power and solar energy, we have seen a surprisingly strong early performance of MNCs from emerging markets, especially from India and China. In the particular case of solar energy, we have seen Chinese solar panel producers rapidly gaining dominant market positions and challenging German, US and Japanese incumbents. The aim of this chapter is to understand the rise of Chinese solar producers. Implementing new technologies and developing new markets for solar energy have traditionally been the exclusive domain of western MNCs as this requires strong research and development (R&D) capabilities, economies of scale, financial strength, superior organizational capabilities and an extensive marketing and distribution system. And indeed, the solar industry has historically been dominated by players from Japan and Germany and to a lesser extent the US. However, more recently Chinese challenger firms are surprisingly rapidly gearing up to challenge the incumbent market leaders. Already, Chinese solar panels account for 27 percent of the world market and Chinese producers are rapidly upgrading to high-efficiency types of solar panels. In 2007, the Chinese module production increased by 60 percent, reaching 1,...
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