"During the 12th Five-Year Plan (2011-15) period, we have 432 projects with a total investment of 536.4 billion yuan ($84.8 billion) to help the city's transformation from a high-carbon city into a low-carbon one," said Geng Yanbo, mayor of the city.

He said the city's target is to raise the proportion of clean energy produced to 25 percent by the end of 2015.

Construction of a polysilicon factory with an annual production capacity of 25,000 tons will start next month, said Geng. Polysilicon is the main material used in solar panels.

Golden Concord Holdings, one of the world's largest polysilicon manufacturers, plans to invest 14.68 billion yuan on five solar energy projects, including a polysilicon factory and a solar power station, in the southeast of Datong.

Datong has a huge reserve of coal. The total coal output in 2011 was 103.48 million tons, about one-eighth of the total amount of Shanxi.

However, it was other geographical advantages that made Datong attractive to the solar power industry.

Geng Yanbo, mayor of Datong, Shanxi province

The city is located on the northeast side of the Loess Plateau at an altitude of 1,000 to 1,500 meters and enjoys on average 2,800 hours of sunshine a year. Datong is classified as a rich area of solar resources by the wind and solar energy resources assessment center of the China Meteorological Administration.

Geng said Datong's solar resources could potentially provide 10 gigawatts of solar power. Construction on the first photovoltaic solar power station, with a 20-megawatt capacity, began late last year.

Meanwhile, Golden Concord plans to build a PV solar power station of 500 mW, and another of 300 mW together with Foxconn Technology Group, one of the world's biggest electronics manufacturers.

To encourage the companies to develop new energy in Datong, the city government has agreed to supply Golden Concord with 500 million tons of coal to ensure power supply for polysilicon production, said Geng.

"The cost of polysilicon will be even lower in Datong than in Jiangsu province, the largest production base of polysilicon in China, if coal resources are provided for power supply."

New chance for PV industry

Regarding the possibility of supply exceeding demand in the domestic solar panel industry, Geng said it would not be an obstacle to the city's solar power development.

"The cost of polysilicon has been falling in recent years and the scale of solar panel exports is being harmed by the anti-subsidy and anti-dumping investigations started by the United States. But these factors will help open up the domestic market," he said. "It is a good time and opportunity for industry insiders and policymakers to think again about the domestic solar power market."

City to host Solar Decathlon

In next August, Datong will hold the sixth Solar Decathlon, an international competition in which college teams design, build and run energy-efficient solar-powered houses. The competition is held every two years, run by the US Department of Energy and the National Renewable Energy Laboratory in Colorado.

During President Hu Jintao's visit to the US early last year, China's National Energy Administration signed an agreement with the US energy department and decided to hold a Solar Decathlon in China for the first time.

"The competition will be a chance for the city to go green and international," said Ma Anquan, director of Datong's Development and Reform Commission.

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