Suntech Power predicts that the cost of building large scale solar PV plants could match the cost of coal-fired generation in China by 2016, a development that will “completely transform” the energy market in the world’s second biggest economy.

Eric Luo, the CEO of Suntech Power, which last month completed a buyout by Shunfeng Photovoltaic International, says that solar PV is rapidly catching up to the cost of coal-fired generation. (China is the world’s largest consumer of coal).

“The levellised cost of generation is still coming down,” Luo told RenewEconomy in a telephone interview from his headquarters in Wuxi in China this week.

“We are not far away from the cost of production for conventional energy. We are sure that by 2016 – or at the latest 2017 – the levellised cost of solar PV will be the same as coal-fired generation in China.”

“It is going to completely transform the energy market in China,” Luo added, noting that environmental concerns would also accelerate that transformation. “China is investing a lot of money into the environment to clean up the energy production process. This is a major opportunity.”

Luo predicted that the annual installation rate of solar PV in China would top 25GW by 2020. It could even be more, should the regulations and the modeling around distributed generation be resolved. This would involve leasing and other financing. Battery storage would also have a significant impact on the solar market. “If model is right, then it (distributed generation) will be flying in China,” Luo said.

(The 2014 target for China is 14GW, although there is debate about whether this target could be reached because of concerns about the structure of the market for distributed solar, which is supposed to account for more than half that capacity).

Luo was speaking in one of his first interviews following the recapitalization of Suntech, once the world’s biggest and best-known solar brands, following its collapse under the weight of debts a year earlier.

Luo says he is head of a much leaner organisation. The number of managers has been reduced from 300 to less than 100, and the company’s focus is now on repositioning itself as an “integrated clean energy service provider.”

That is why it has recently invested in an inverter company and a battery storage developer. The company is also focusing on downstream projects, following a similar transition by other major solar manufacturers.

“We want to focus on the entire value chain,” Luo says. This means capabilities in design, engineering, manufacturing, construction, finance, insurance, operation and maintenance.

One of the keys for the company is a large global marketing campaign (Suntech has launched an advertising campaign – a “New Dawn” – on RenewEconomy and other web-sites), and the company will spend time talking to customers, financier and investors.

Suntech expects to quickly ramp up to its stated annualized manufacturing capacity of 2.5GW of solar modules by the end of this year – more than its peak in 2011. This won’t bring it back to the top of the solar tree, but it will regain its position in the top 10 manufacturrers.

Luo said Japan remained a very strong market with rapid growth for Suntech, the US was also promising, although Europe had declined.

Luo describes Australia – where the company has invested heavily in solar PV research projects – as one of its “traditional market.” He said the company would focus on household and commercial scale solar installations, but it would also be a base for an increasing presence in the Pacific islands, particularly in French Polynesia.

However, Luo said he was concerned about the anti-dumping investigation brought by Australia, at the behest of Adelaide-based Tindo Solar.

“We are very upset about it. because we don’t understand how it can happen. In Australia, there is no manufacturing of solar cells, or modules. It is not like Solar World in the US where there is very visible manufacturing.

“In Australia, it is difficult for us to understand why this action will be brought. We hope it will be amicably resolved. We still believe this is just a little bit of distraction.”