During March 27 through April 1, 2001, the Solar PV Company Training Program and Village Power Workshop was conducted in Xining in Qinghai Province in China. The World Wide Fund and the W. Alton Jones Foundation sponsored the first half of the workshop as a special training event for PV company managers and marketing personnel. The emphasis of this portion of the workshop was on providing expert training by domestic and international business leaders for the development of business plans and marketing programs for small-scale PV companies and entrepreneurs. The second half of the workshop focused on barriers and solutions associated with the commercialization and wide spread dissemination of community-scale hybrid village power systems in China. Financial and organizational support for the village power workshop was provided by the United Nations Development Programme/Global Environmental Facility (UNDP/GEF) Project called Capacity Building for the Rapid Commercialization of Renewable Energy in China, which also includes financing from the State Economic and Trade Commission, the Australian Aus-Aid Program, and the Government of the Netherlands. The workshop was organized by the Center for Renewable Energy Development (CRED) in the Energy Research Institute of the SDPC and by Chinese Renewable Energy Industries Association (CREIA).
Approximately 80 people attended the workshop during six days of lecture, discussion, and working sessions. Attendees included approximately 40 solar companies and research institutes involved in the manufacture and sale of solar home systems. In addition all of the major domestic PV cell and module manufacturers were represented in Xining. The other half of the audience consisted of key government, utility, and other decision makers from county and provincial governments from five provinces in western China, representing the largest market potential for remote rural energy systems for unelectrified households and villages. The workshop trainers were recruited from a pool of experience domestic and international professionals with practical business and marketing experience and professionals experienced in developing and implementing village power projects in China. The workshop represented the first time in China in which a concerted effort was made to bring together a critical mass of key decision makers associated with village power technology and project development. The business focus in the workshop had a twofold purpose: i) a general transfer of information to provide assistance in the conceptual development of business plans and strategies and for improving the marketing practices of small companies engaged in the solar home system business and ii) creating a forum allowing companies and invited investors to pursue business discussions. The focus of village power commercialization sessions was to develop a consensus on the major barriers and issues associated with market expansion for remote standalone community-scale power systems and to conceive of business models and strategies to promote commercialization of village power systems.
Opening session lectures on the status of solar PV markets and applications and on solar home system standards and quality control issues were given respectively by William Wallace from the UNDP/GEF Renewable Energy Project and by Wang Sicheng from JiKe Company in Beijing. Domestic and international business leaders, who are experienced in solar manufacturing and marketing, led the business and market training sessions of the workshop. In addition to Wang Sicheng, these experts included Jeffrey Dickerson from E&Co in Nepal, Cui Rong Qiang from the Shanghai Jiaotong University, Peter McKenzie from AstroPower in the U.S.A., and Winfried Rijssenbeek from RR Energy in the Netherlands. In lectures and in lively interactive discussion sessions, several topics were covered associated with aspects of business plan development and business strategies, financing, marketing, sales, and promotion. Xining is the center of the commercial solar home business in China, which has experienced exponential growth during the past three years starting with three companies and growing to approximately 50 in Qinghai. Challenges include intense competition, low profit margins, lack of development capital, and highly variable product quality. Some of the business principles emphasized during the discussions including guidelines for product pricing, acceptable and sustainable profit margins, product differentiation, brand-name recognition, targeted advertising, customer financing, and product distribution. It is clear that the competition dominated by a large number of small sales companies of solar home systems is not sustainable in the long term in China and that the best companies must eventually develop techniques to differentiate themselves from their competitors in terms of quality products, innovative marketing techniques, and rapidly expanding distribution networks. During the course of the workshop many of the companies also met with potential investors who were invited to the meeting to pursue business discussions.
The village power section of the workshop included discussions of the existing experience for rural development and rural electrification in China, with key lectures from Charlie Dou of the Bergey Windpower Company in Beijing, Ma Shenghong from JiKedian in Beijing, Niu Zheng Sheng from the Xinjiang Keyi New Energy Development Company, and Wu Dacheng from the Qinghai New Energy Research Institute in Xining. These lecturers provided reviews of the status of solar and village power development throughout China and experiences to date with these systems. Some key limitations in the current market development for village power systems were identified with financing, sustainable operating and maintenance of systems, and the current small scale of project development. Ren Qin representing the GTZ Tibet Mini Hydro Rehabilitation Program in Tibet provided observations from a successful rural development program based on small hydro systems, especially associated with contracting arrangements, retail pricing, operating contracts, and promotion of village economies. Zhao Qingjiang from the Senshan Electric Company Xining Office and He Ping from the Poverty Alleviation Office of the State Council in Beijing discussed ongoing programs in two important sectors for rural development associated with utilities and with China¡¯s substantial efforts at alleviating rural poverty. The Poverty Alleviation Office is currently actively supporting a range of village power development efforts at local levels in several provinces. Ma Shenghong also described the ongoing project development associated with the Brightness Program of the State Development Planning Commission.
During the workshop several off-line meetings were also conducted with key representative companies of the solar industry, with government officials from Qinghai and Xinjiang, and with donor and international business representatives from E&Co, the United Nations Foundation, and the W. Alton Jones Foundation, in separate venues. The information exchanges between government officials and industry representatives were particularly useful in identifying and matching expectations of support agencies with the needs of companies in meeting commercialization objectives in the marketplace. Collectively the meetings helped to promote the concept of linking the development programs of the national and provincial governments for village power and solar home systems with various business models to promote sustainable market development and commercialization. The discussions also helped to identify limitations of government intervention and where government should not interfere in developing commercial markets. Corollary needs associated with resource assessment, creation of new financing channels, and larger-scale project development were also identified.
The solar company training and village power workshop in Xining represented the first of a series of venues that will be conducted in China to address business development issues associated with remote rural markets for renewable energy power systems. Xining helped to establish priorities for future support efforts of the Chinese Renewable Energy Industries Association on behalf of solar and rural energy companies in China and in policy development cooperation with the Chinese government. The Xining workshop was also a key event in providing guidance for development of future supporting activities in the UNDP/GEF Project.
