The year 2008 was the most profitable for Chinese wind turbines parts makers, as fast growth in installed capacity across the country led to short supplies of wind turbine parts. However, a growing number of new players, sensing the fast profits, entered the sector, resulting in excessive supply. Prices of wind turbine generator components have been decreasing ever since. As an example, the price of a wind turbine blade declined to RMB 3,500/kW (approx. $550/kW) in May 2011 from RMB 6,500/kW (approx. $1,000/kW) in May 2008, a decline of 46.7 percent. For survival, some wind turbine blade providers have lowered manufacturing costs at the expense of product quality by using low quality raw materials during their manufacturing process. If the price war continues, China’s small wind turbine sector could well collapse, according to an industry insider.

Shi Pengfei, Vice President of the Wind Energy Professional Committee of the Chinese Renewable Energy Society, said recently that following the significant growth of installed capacity between 2006 and 2010, China’s wind power sector has entered an accident-prone period due to insufficient quality control and poor wind generator management in construction of wind farms. According to preliminary statistics, 16 wind turbine generator sets caught on fire or collapsed between the beginning of 2009 and April 2011. The development of supporting facilities including equipment for access to the power grid, technology and industry standards has lagged far behind the construction of the wind farms themselves.

Last but not the least, according to U.S. Trade Representative Ron Kirk, the Chinese government has decided to stop subsidizing wind power companies that use domestically made components rather than imports.