One firm going ahead with capital investment is ethylene vinyl acetate film maker Seekan Interlayer Technology Co., which supplies EVA film to solar module makers. The Zhenjiang, Jiangsu Province-based company is building a second factory that will give it 15 lines, doubling its production capacity when it opens in 2010.

China's export-oriented photovoltaic solar module production industry saw, by several estimates, a roughly 50 percent cutback in production after last year’s financial crisis. China’s domestic solar energy market is relatively small, and most of its firms target exports.

But companies are hopeful that government spending on clean energy, including a subsidy scheme announced by Chinese officials in March, will help turn rhetoric about green power into reality, and boost domestic demand in China.

Worldwide, DuPont Co. projects that it will triple sales of its plastic and metallic materials in the PV solar industry by 2012, to US$1 billion. A U.S. solar power group says the industry in America expanded 17 percent in 2008, a potential boon to China’s exporters

Seekan spokeswoman Alina Lee said, "the Chinese market has shrunk a lot but we still have great expectations for the future…We know there are many new factories to produce solar panels. The world market is expanding so we don't think it is a risk."

Others, however, like EVA sheet maker Wenzhou Longwan Plastic Additive Co. Ltd. in Wenzhou, Zhejiang Province, said they are holding off on solar market plans because of the financial tsunami, the company said in an email response to Plastics News.

One smaller American plastics industry supplier wants to get into China's solar mix.

Extrusion Dies Industries LLC, which makes flat dies for the sheet, film, coating and pelletizing for the plastics industry, is building a coating station in its Chippewa Falls, Wisconsin, headquarters specifically to move to its Shanghai factory, because it sees potential in solar module and battery markets in China.

"We did that strategically because there is so much interest over there at the moment," said Mark Miller, manager of EDI's new development group. Because the solar industry is new, there’s a lot of room for technology advancements to make it economical, he said.

He said EDI is tailoring its technology for both rigid solar panels, which are about 90 percent of the market, and emerging technology in flexible solar panels, where much of the plastic films go.

He said the company's slot die technology can help solar film makers, for example, speed up the coating process by a factor of 10. The company is seeing growth in its solar business around the world, even as other markets are slower.

"We see that as something that is growing while everything else is stagnant," he said. "Depending on government intervention, it could be huge or it could be like it is now."

China's solar power industry was taken by surprise by falling export markets in the economic slowdown, although companies now are promoting the domestic market, said Professor H.X. Yang, coordinator of the renewable energy research group at Hong Kong Polytechnic University.

He said the industry will need government subsidies to develop, because electricity from Chinese coal plants costs less than one yuan per kilowatt hour, while solar power now costs 2.5 to 3 yuan per kilowatt hour.

"If we don't have a policy from the government to provide subsidies, it will be very difficult," he said.