Dear Members of the Board,
I would like to address this letter with regards to our energy projects developments abroad.
Before targeting a specific market and choosing which energy resource to develop, there are some
legal issues to consider and that I would like to highlight hereby. Every country that has its own
energy regulations that are responsible for ensuring that the required energy sources are used and
monitor the effects of the sources if any.
Considering the aim of our business, I thought it wise that we develop our energy projects in
China or the United States of America. The growing economy of China will provide a boost to our
project because most of its operations require a source of energy to sustain the twenty-four-hour
economy that has been put in place by the Chinese government as well as its citizens. The United
States on the other hand would be an ideal country abroad to develop the energy projects because it
is already an established economy and would therefore require a boost in the energy sector because
as much as it is among the largest producers of energy, it is as well among the largest consumers of
energy (Hernandez, et al, 2015).. The two countries are therefore good for comparison because of
their strong economic base which attracts development of energy projects. Energy being at the
center of the development and sustainability of the economy, it is therefore important that a
comparison is made between the two countries and the best energy project chosen that would suit
the needs of the economy without violating the energy regulations that are in force in the said
In order to arrive at the energy project to be developed in either of the two countries, it is
good to determine two energy sources that would be viable for development in the said countries. It
would be worth considering solar and wind energy as the energy sources to be developed in either
of the two said countries. Solar and wind energy are chosen for comparison due to the fact that the
two are readily available and at no cost (Hernandez, et al, 2015). In order to develop wind energy,
there only has to be wind, a resource that is readily available. Solar energy on the other hand as well
only requires sun which is a resource that is as well readily available. In addition, the two energy
sources are chosen because the chances of them leading to environmental pollution and degradation
Solar energy would be ideal for the development of energy projects abroad because it can be
used to generate energy which does not produce any greenhouse gas emissions which are usually
associated with fossil fuels thus leading to a substantial decrease in various types of air pollution.
Solar energy is also good because, through its production, there would be diversified supply of
energy thus reducing dependency on a single source of energy as well as other imported fuels
(Hernandez, et al, 2015). For solar energy to be generated, there have to be solar panels, this,
therefore, means that there would be economic development since there will be jobs in the
manufacturing of the solar panels, not forgetting their installation which requires expertise in that
According to the United States Department of Energy, solar energy has in the recent years
turned to be a more affordable, accessible, and a prevalent source of energy than it has ever been
before (Sahu, 2015). According to the Department, from the year 2008, installations of solar panels
which results in solar energy have increased by about seventy percent. The increase in solar energy
is approximated to be enough to serve approximately 5.4 million American homes (Sahu, 2015). It
is also reported that the average cost of solar panels which are responsible for providing solar
energy has significantly dropped by about sixty percent as compared to the value at which it was
being sold about five years ago. This is, therefore, to say that there are solar-friendly policies and
regulations in the United States which have greatly contributed to the growth of solar energy
production and consumption.
China has developed to be a country that is rich in solar energy resources, production as well
as consumption. The land surface radiation of solar energy resources every year in China is equal to
five trillion tons of the standard coal. With a slow emergence from the shadow of the global
financial crisis, the solar power industry of China has had an unexpectedly positive time. It is
therefore ranked as the highest producer of solar energy in the Middle East and one of the highest
producers as well as in the rest of the world (Geall, & Shen, 2018). There are regulations that have
been put in place by the Chinese government to ensure that there is a high investment in renewable
energy with much interest in solar energy. It is therefore good to consider some of the legal issues
that have been put in place in the two countries so that we get to know out of the two countries
which would be ideal for the development of the energy projects.
Legal issues in China.
The government of China passed various laws and regulations that relate to energy
production and consumption in China. The set regulations play an important role in ensuring that
there is enough energy to serve the Chinese people both at the domestic and the industrial levels
(Geall, & Shen, 2018). The laws as well are important because they help in ensuring that in the
course of production and consumption of the energy, there should be minimal environmental
degradation as a result of the energy source being used. The legal issues in China therefore include;
Policy on the Foreign Investment in Solar energy Industry.
The legislation was enacted in China in the year 2007. According to this catalog for the
Guidance of Foreign Investment Industries, solar-related industries belong to Catalogue of
Encouraged Foreign Investment industries (Zhao, et al, 2011). Judging from the provisions
enshrined in the policy, it is evident that the government of China is not opposed to foreign
investment in industries that are related to solar power in China. Foreigners, according to this solar
energy regulation are allowed to invest in a solar company in China without having to create a joint
venture with a native Chinese company. The government of China is, therefore, making great efforts
to come up with new sources of energy and new technology for energy use. It is really a good time
and point for foreign investors to invest in solar power related companies. Foreign investors
therefore who are willing to invest or are planning to invest should, therefore, embrace the
opportunity provided by the Chinese government with open arms.
China Renewable Energy Law
The China Renewable Energy was a law issued by the Standing Committee of the National
People’s Congress in December 2009. China being among the largest economies of the world chose
to make one of the greatest commitments sponsored by the state which is geared towards the
improvement of production and consumption of renewable energy (Shen & Luo, 2015). The
government of China chose to impose a national renewable energy requirement which has been
poised to boost the use of renewable energy in the entire Chinese economy by about ten percent by
the year 2020. The rationale behind the enactment of this law was to ensure that there is
conservation of the environment. The other sources of energy in the course of their production, it
was realized that harmful emissions such as gases were released into the atmosphere causing
atmospheric and environmental degradation. Due to the fast-growing economy of China, there has
been a significant increase in the consumption of energy which has, in turn, led to an increase in
harmful emissions into the atmosphere as well as causing shortages in power. The China Renewable
Energy Law was designed in a way that is meant to give protection to the environment, prevent
shortages in energy as well as reducing the dependence on energy that is imported (Si, et al, 2017).
The new energy law in China provides a platform upon which there can be a widespread
development of renewables. The enactment of this legislation therefore by the Chinese government
is a move that encourages the construction of power facilities that produce renewable energy.
There is also a legislation by the Chinese government which states that priority shall be
given by the state towards the development and usage of sources of energy that are renewable in
energy development thus promoting the establishment as well as development of the renewable
energy market by coming up with an overall target for the development and usage of renewable
energy and adopting correspondence measures (Zhou, et al, 2010). The government of China shall
encourage economic blocs from various spheres of life and of different ownership to take part in
developing and using renewable energy. The Chinese government also pledged to protect the
legitimate rights and interests of the parties that make use of the renewable energy.
Legal issues in the United States of America
The United States of America is among the largest producers as well as consumer of energy.
For that reason, it has strived to maintain a strong base in terms of energy production which has
been the backbone to their strong and growing economy. The federal government together with the
respective states has regulations that relate to energy production and consumption in the United
States. The regulations have played a pivotal role in ensuring a smooth running of the activities that
relate to renewable energy as well as fossil sources of energy.
According to the energy regulations in the United States, homeowners who install rooftop
solar panels do not receive any incentives (Sahu, 2015). Net metering was phased out due to the fact
that the solar customers did not have to pay for the t maintenance of the grid. What this means is
that the people with solar panels do not enjoy as many benefits as they had expected.
A law was also passed in San Francisco with regard to renewable energy, specifically solar
energy. An ordinance was passed that required all new buildings constructed in the United States to
install solar panels on their roofs (Hernandez, et al, 2015). The law is applicable to both residential
as well as commercial buildings which are built ten stories or shorter.
A law was also enacted in California regarding self-generation of electricity. Statutes were
enacted to allow owners of private property to produce electricity using their own means without
exceeding a certain output (Sahu, 2015). What this means is that one can generate their own
electricity using solar energy as long as the energy produced does not exceed the set standards.
Effect of the energy regulations on the business case.
The Chinese Policy on the Foreign Investment in Solar energy Industry is a welcome
legislation in the face of the business. It is a legislation that allows private investors who are willing
and able to invest in China in the production of renewable energy with the specification of solar
energy. What this means is that our company is at liberty to venture into the production of the
chosen development of solar energy since the government of China itself is welcoming foreign
investors. The business will therefore not be so much affected by resistance from the government or
any other quarters of the Chinese population since any company is allowed to carry out that
business without having to partner with a local company. It is therefore worth noting that it would
be easier to do business in China since it there are not as many bottlenecks for one to enter the
market and venture into the production of solar energy. That being the case, China is determined to
ensure there is an increase in their economy and the best way this can be achieved is by ensuring
that there is an alternative source of energy which would still effectively serve the people of Chin
both at the commercial as well as the domestic level.
With our interest to venture in the development of energy in a foreign country, it would be
wise to settle for China because of their renewable energy law which advocates for the production
of and consumption of renewable energy. Solar energy being a type of renewable energy which we
are willing to develop abroad, China, therefore, provides an opportunity for our business to explore
and develop the project. Renewable energy such as solar energy which we are interested to develop
is good since it does not lead to environmental pollution. The Chinese government, therefore, has
encouraged foreign investors to invest in production of renewable energy with a view to protecting
its environment, it is therefore good for the business since the project that we are willing to develop
will as well help in conservation of the environment as well as providing energy to the people of
The laws and regulations that are in place in the United States of America are not too
friendly for the business to thrive. America is more concerned with ensuring a steady supply of
electricity for smooth running of electricity (Peisheng, Mingxia & Center, 2015). It, therefore, does
not pay so much attention to the use of solar energy as an alternative source of power. The United
States of America, therefore, lays much emphasis on fossil energy which is not likely to fail them as
compared to solar energy which solely depends on the sun for it to function properly. It would
therefore not be ideal to set the business in a country that does not pay much attention to the source
of energy we are willing to develop. Besides, America does not get so much concerned about the
environmental issues that are likely to occur as a result of using fossil fuels, instead, it is so much
concerned with how it will ensure a steady supply of electricity to run its economy (Hernandez, et
The law enacted in California that allows private investors to produce their own energy from
whichever source as long as it does not exceed a certain level is a legislation that will work to the
disadvantage of our business. The limitation on the amount of energy that is to be produced means
that there would be penalties just in case there is an excess on the set limit of the amount of energy
produced. It wouldn't, therefore, be advisable to develop the project there because of the limit that is
In conclusion, it would be good for our company to develop energy in China because of its
flexibility and friendliness in terms of the regulations that exist in China as far as solar energy is
concerned. Unlike the USA which has strict regulations that would make the operations of the
company slightly difficult, China is open and it allows investment in renewable energy. China also
does not have a limit on the amount of energy that private investors can produce from solar energy.
China, therefore, is a better country to develop an energy source as compared to the USA.