By David Thomas

Chinese cities are experiencing their own version of the London fog of Victorian Britain. Smog in Beijing was at a record high this month, causing factories to be closed until the levels dissipated.

The health risks have convinced Shi Dinghuan, president of the Chinese Renewable Energy Society, to raise his organization's solar targets from the level set in 2011, 21 gigawatts, to 35 gigawatts by 2015. This will provide five times the solar capacity as there was at the end of 2012. “We’ve got more pressure to save energy and reduce emissions as smog worsens due to pollution,” he said.

Solar power is the natural choice for China. Panel prices have dropped by 25 percent in the past year, and there is greater supply than demand at the present time. This is partly due to the U.S. tariff on Chinese panels designed to safeguard their own homegrown panels. Similar policies are likely to be enacted in European nations.

The impact of the tariff on Chinese panel exports has been serious. At first, there was talk of a counter-tax on cheap raw polysilicon, one of the raw materials in solar pv, which is currently imported into China. A reactionary tariff is now looking unlikely, as it would most likely add further pressure on Chinese panel production, which survives due to its margins.

Meanwhile, the twenty million people living in Beijing are suffering the consequences of China’s industries, powered largely by coal and things could get worse before they get better. Earlier statements have indicated that the next generation of Chinese power plants will be 70 percent coal, due to the nation’s massive energy demands.

China is the world leader in terms of total carbon emissions because of its rapid development - not because it is a pollutant state. The ramp up in solar targets indicates that some officials are looking for a solution. The government has also offered 13bn Yuan ($2.1bn) in solar subsidies to encourage the growth of its renewable power industry.

At the end of 2012, two of China’s largest solar manufacturers, LDK Solar and Suntech, experienced a jump in stock price. The recent developments in Beijing will see plenty more business coming their way in the next decade.

[Image credit:Lu Feng, Flickr]

David Thomas writes about cleantech, government policy and energy efficiency for The Eco Experts. You can speak to him @theecoexperts