A SURPRISE China solar power subsidy will prop up domestic factories and shows how a hunt for jobs is leading climate change diplomacy. Recession is fuelling government support for green collar jobs, which contrasts with slow negotiations on how to split the cost of cutting carbon emissions in UN-led climate talks. President Barack Obama has embraced the clean energy sector as a key area of growth for the US economy, in sharp contrast to former president George W. Bush. China's solar subsidy announced on Thursday was especially surprising given solar is far more expensive than wind and hydropower, and was an attempt to boost local manufacturers suffering sagging international demand, analysts said. “With concerns about energy security and economic recovery, you're seeing countries try to get market advantage and create new (cleantech) jobs,” said Jennifer Morgan, climate director at environmental think-tank E3G. “The UN negotiations are focused on burdens rather than opportunities.” Those talks resume next week in Bonn, Germany, to try and lay the foundations for a new climate treaty meant to be agreed in Copenhagen in December. Analysts said the Chinese measure would boost solar power deployment by less than 300 megawatts this year, or less than one coal plant, not least because it was limited to roof-tops rather than utility-scale solar parks. China accounted for less than 2 percent of total added solar photovoltaic (PV) power last year, said Citi analysts – about ninth place in global rankings. But it has form in moving up renewable energy league tables – becoming the world's number two wind market last year. The new solar subsidy covers about half the installed cost of solar power, analysts said. “As a broad longer-term indicator for a potentially large market, it's a great start and China is coming off a very low base,” said a Citi report published on Friday. Products The United States has introduced a raft of measures to support renewable energy in the past six months, from tax credits to about $30 billion spending under wider economic stimulus spending. Share valuations of US solar power companies have out-performed global peers since the US passed an eight-year extension of tax credits for solar power last October, said HSBC analyst Joaquim de Lima. US solar trade bodies estimated 110,000 new solar jobs over a two-year period as a result of new incentives, he said. The United States, Europe, China and South Korea have led green spending plans of $300 billion-500 billion, or about 15 percent of wider economic stimulus plans. Outside the United States funds have focused on efficiency, public transport and waste management, not renewable energy. “The US are investing in R&D but the largest bulk (of new green stimulus money) is going in the next two years, you can only imagine they're doing that because they want to get up and running in terms of manufacturing capability,” said de Lima. Shares in China-based companies benefited from Thursday's news, rising up to 40 percent on the day. They lost about a third of those gains in early trade on Friday. Germany is Europe's second-biggest photovoltaic industry, pipped by Spain last year, and provides 45,000 jobs and generated revenues of 7 billion euros ($9.50 billion) in 2008, according to the German Solar Industry Association.
