Government support created manufacturing giants such as LDK Solar and Suntech Power Holdings and made them dependent on financial aid from local authorities. As the price of photovoltaic products recovers, those companies remain crippled with debt and overcapacity, leaving a return to profits over the horizon.

Beijing's backing for the solar industry has left at least one factory producing photovoltaic products in half of the country's 600 cities, according to the China Renewable Energy Society. Panel prices, even after gains in the past six months, are 60 per cent lower than in November 2010 and have forced into bankruptcy dozens of those companies, including the largest unit of Suntech, once the industry's biggest producer.

The market, known as Silicon Xinyu, was the first permanent trade fair of its kind in the country when it opened last year. Today, it's a ghost town, highlighting the unfulfilled promise following the country's investment in building its solar industry.

"The state of the industry is not good," said Ou Xiaoliang, the 23-year-old operating officer of Money Leopard New Energy, a developer of solar projects and one of the complex's remaining tenants. "They went back to headquarters, because there were no profits to be had here."

LDK and Suntech are in the top tier of mainland solar manufacturers that prospered with state support and sold shares to investors in New York in the past decade. China's solar industry now accounts for seven out of every 10 solar panels produced worldwide and eight of the top 10 panel makers, according to data.

All that building led to overcapacity. Were they to run at full speed, the mainland's factories could produce 49GW of solar panels a year, 10 times more than in 2008 and 61 per cent more than installed globally last year, according to data. A gigawatt is about as much as what a new nuclear reactor can supply.

China's involvement in the industry widened in 2004, when its suppliers began to boost capacity to meet demand created by incentives for solar projects in Germany, according to Jenny Chase, an industry analyst at Bloomberg New Energy Finance.

Sales soared as Europe and US states from New Jersey to California offered incentives for renewable energy. Solar-cell prices declined, making even more developments profitable. Annual global solar installations reached 30.5GW last year, more than 10 times the figure for 2007, according to London-based BNEF.

Hundreds of manufacturers sprang up, including Suntech and LDK. They built bigger and more automated factories than ever seen, squeezing prices lower and hurting Sharp of Japan, Q-Cells of Germany and Solyndra of California. The latter two entered bankruptcy along with at least 30 other companies.

The cost of a solar cell is about 41 US cents a watt today, down from US$1.46 in 2010.