Every hour 30,000 passengers pass through Beijing South Railway Station, rushing through the entry hall which extends 32 hectares, to one of 24 platforms. But it's not the size of the building that's impressive, it's the roof of the arrival hall whose 3,246 solar panels make it a symbol of a new energy age.
At the station's inauguration in 2008, China's solar ambitions were still the subject of ridicule from the international community. Since then, China has become one of the largest producers of solar energy, on its way to becoming the world's biggest pioneer in alternative energy. In the last 12 months, China has nudged ahead of Germany as the biggest solar power nation. But by 2020, Beijing plans to be producing 143 gigawatts - more than three times its current output.
In the last year alone, China has increased production by 15 gigawatts. To put that in perspective: One gigawatt can power 350 Beijing households for a year.
This year China's National Energy Administration aims to create new solar installations producing 18.1 gigawatts. Although coal is still China's most important power source, sun and wind are already becoming an important part of China's energy mix.
The road so far has not been easy. In state capitalist manner, Beijing called on the country to build a solar industry and provincial governments bred dozens of local companies. But the industry took shape without regard to efficiency or demand, leading to overcapacity and the death of many companies.
The future energy mix won't contain fossil fuels. Dirty, ozone-damaging energy sources will disappear in the next 50 to 100 years. Han Wenke, Director, Energy Research Institute
That's changed. Yingli Green Energy, with 15,000 employees one of the largest companies in the sector, was once close to bankrupt. But it has since recovered and company chairman Miao Liansheng announce a profit for the first time in five years earlier in 2016.
China's sun king Gao Jifan has been making a profit for a long time as head of Trina Solar, the world's biggest solar energy firm. He is confident, saying China's solar boom is just beginning. “China's solar capacity is expected to rise to 400 gigawatts by 2030.”
“There is a whole array of interesting new developments,” Mr. Gao told Handelsblatt. “In the next 10 years we'll see the further development of the silicon solar cell.” He said that the efficiency of silicon cells will rise from 20 to 25 percent, up to 25 to 30 percent. His company is also working on better battery storage technology.
In the first quarter of 2016 he doubled Trina's net profit to $27 million.
The hardest times for China's solar sector are now in the past, according to Han Wenke, director of the Chinese Energy Research Institute. “The future energy mix won't be fossil fuels,” he said. “Dirty, ozone-damaging energy sources will disappear in the next 50 to 100 years.”
China is at the forefront of the wave of change.
Mr. Han expects a big push towards green energy in the coming year. Then China wants to show the United States and Europe how emissions trading is really done. The principle is simple. When a company pumps greenhouse gases into the atmosphere, they'll have to pay with emissions certificates which are traded on the energy market.
That should make dirty energy sources unattractive and create new incentives for sustainable energy sources and nuclear power, according to Mr. Han.
The quicker demand grows, the cheaper the suppliers can offer their product. Since the start of 2015 the world's biggest suppliers have been able to lower their production costs by 13 percent. The Asian producers have been particularly successful at bringing down production costs.
Until now, users in Europe haven't seen any benefit from that. The European Commission found in 2013 that Chinese suppliers were dumping solar modules on the market. Since then there have been fixed minimum prices and import duties, to protect European suppliers. That's being reassessed now and a decision is expected in early 2017.
Mr. Gao of Trina denies there is any state subvention of China's solar industry. And he says that the E.U.'s protective tariffs and minimum prices, set in 2013 after long negotiation, are too high.
“Production costs are much lower,” he said. “This completely distorts the European market. So, since last year, we've stopped exporting there.”
Regardless of whether the protective tariffs are upheld or not, it's already clear that Europe has lost the battle for supremacy in the solar industry. Of the world's 15 biggest solar companies, 10 are Chinese. And the dominance of Chinese firms is set to expand over the next decades.
“Chinese suppliers have much lower fixed costs than their western competition,” according to Henning Wicht, solar expert at the IHS solar research group. Module manufacturers from the Far East can produce on average 22 percent cheaper than their counterparts in the U.S. and Europe. Mr. Wicht says that's largely due to economies of scale.
The biggest solar cell factory in the world, which supplies market leader Trina, has a production capacity of 3,200 megawatts. The largest module factory of SolarWorld, Europe's leading photovoltaic cell manufacturer, has a capacity of just 650 megawatts. That means Trina can produce five times the capacity without an increase in fixed costs.
The evolution of the European market has also proved a disadvantage for Western producers. At its high point in 2011, more than 19 gigawatts of solar capacity were installed; it will be little more than 8 gigawatts this year. Within the European Union, solar energy accounts for just 3.2 percent of the energy mix. In Germany it's around 6 percent. The market is stagnating while China's industry booms. But, even in the Far East, growth has its limits.
Many provinces can't keep up with the expansion of capacity. Solar parks stand useless, because there's no network connection in the area. Last year around 12 percent of available capacity went unused, according to the state energy authorities. For wind power, that figure stands at 26 percent. The Chinese Wind Energy Association suspects that this unused capacity is the result of a deliberate policy by provincial governments.
In the eyes of provincial government functionaries, coal power stations have priority, because they're cheaper and create more jobs. In Xinjiang province solar and wind parks are saddled with extra taxes in order to subsidize coal-fired power stations. Research by the prestigious business magazine Caixin corroborated the accusations of the wind-power lobby.
Luc Graré, senior vice president for sales and marketing at REC SolarPower Europe, looks mistrustfully on developments in China.
“We're once again entering a phase of overcapacity,” he said. That leads to increased price pressure. Chinese companies are carrying out “massive dumping” in Australia and Africa to offload units that they just can't get rid of at home, he said.
“It has to move towards a consolidation phase,” Mr. Graré said.
He said it's unlikely that REC itself might falter, even if the protective tariffs are lifted. “That wouldn't be the end of us,” he said.
The fact that REC is now producing in Singapore has helped keep their cost structures competitive. But he admitted that without minimum prices, pre-tax profit margins of eight to 10 percent would become a distant memory.