MELISSA BLOCK, Host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
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NPR's Louisa Lim reports from Shanghai.
LOUISA LIM: The future of sustainable energy is here. These words are emblazoned on a wall at the world's largest nongovernmental solar research center. It's built by an American company, Applied Materials, but it's not in the U.S. It's in the Chinese city of Xian.
CHARLIE GAY: Unidentified Man #1: (Foreign language spoken)
LIM: Here's Charlie Gay, president of Applied Materials solar division. He says two years ago the company predicted the cost of manufacturing solar panels would drop rapidly. One reason for that is China. It's now the world's biggest producer of photovoltaic solar panels, making about 40 percent of all panels, mostly for export.
ELIZABETH MAYO: So, when was the last time you celebrated?
LIM: At Applied Materials' Xian Center, Elizabeth Mayo, a process engineer from Santa Clara, is working with local staff testing solar panels. She's impressed by the facilities.
MAYO: Unidentified Woman #1: Oh, yeah, (unintelligible), so maybe (unintelligible).
LIM: Magnitude would be right. We see vast empty hangars waiting for new production lines to be installed. Pilot lines for crystalline silicon and thin film solar technology are being developed. My tool guide is Catrina Ren, an enthusiastic English-speaking engineer.
CATRINA REN: I'm very proud of - have a chance to work here because this is the most advanced technology center in the world. I graduated from university only two years. So, I'm very proud.
LIM: And Applied Materials is no doubt overjoyed to have Catrina and her classmates on staff. After all, an engineering graduate here in Xian earns just a tenth of her American counterparts. Costs here in China are much cheaper than in the U.S. And the biggest draw is the eternal lure of China's fabled market. Here's Gang Zhou, the general manager of Applied Materials' Xian facility.
GANG ZHOU: Unidentified Woman #2: Ratio compared to that.
LIM: (unintelligible) validation, as she calls it, is what Elizabeth Mayo and her colleagues are doing in the test lab. (unintelligible) edge innovation is still taking place in the U.S. and Europe because of Chinese problems. That's according to Charlie McElwee, an energy and environment lawyer based in Shanghai.
CHARLIE MCELWEE: There are still issues with respect to protecting your intellectual property in China. And so, those kind of things where you discover the next big thing probably will still be done in the United States for a while, simply because it's easier to protect your IP there. Companies are coming to China to do clean tech for the same reason they came 25 years ago to make shoes or T-shirts. It's simply cheaper to make things in China.
LIM: And so, American green tech companies are flocking to China. First Solar is building the world's largest solar plant in Inner Mongolia. Duke Energy is sharing solar, clean coal and smart-grid technology. Officials in the Obama administration are beginning to sound spooked. Here's Commerce Secretary Gary Locke speaking in October.
GARY LOCKE: Unidentified Man #1: (unintelligible) we made it by ourselves. All the design is by ourselves.
LIM: Shi Jun believes China will take the number one spot for installed solar capacity in just three years. American companies are ahead technologically, he admits, but they face other disadvantages.
SHI JUN: The States, they have many good technologies. President Obama has give some policies. Until now, I cannot see the real impact on the companies. Also, I think the cost is a very big problem for the USA factories.
(SOUNDBITE OF MACHINERY)
LIM: Louisa Lim, NPR News, Shanghai.
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