Solar power: a bright future at last?

After years of watching its cities choke with smog (left), China's government is investing in a solution to lift the gloom: solar power. We look at the best ways to get into this $11bn global industry.

Beijing is the air-pollution capital of the world. More than 400,000 people die prematurely from pollution-related diseases in the city each year. Tourists find that a day spent there is enough to leave them with burning eyes and a hacking cough, and local residents are regularly urged to stay indoors as the city is shrouded in a yellow sulphurous cloud. The rest of China is little better. A recent World Bank report found that 16 of the world's 20 most polluted cities are in China. The cost of water and air pollution amounts to more than $100bn a year, or 5.8% of China's GDP, says the report.

But after years of watching its cities choke with smog, China's government is investing in a solution to lift the gloom: solar power. China is building a solar industry that it hopes in the next decade will rival global leaders Germany and Japan and rid the country of its reputation as the "dirty dragon". The Olympic stadiums are being glazed with solar panels, venture capitalists are pouring funds into solar research and solar power stations are already bringing electricity to 30 million rural Chinese who had no access to it before. By 2010, China aims to meet 15% of its energy needs through renewable sources, of which solar will play a major part. And China isn't alone here: solar power is rapidly becoming the alternative energy source of choice it's an $11bn global industry that's growing by more than 25% a year.

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Eoin came to MoneyWeek in 2006 having graduated with a MLitt in economics from Trinity College, Dublin. He taught economic history for two years at Trinity, while researching a thesis on how herd behaviour destroys financial markets.