Now, however, there are signs that the boom might be over. Half-yearly figures from leading Chinese turbine manufacturers show growth in profits declined in the first half of 2010.
XEMC, based in central China's Hunan Province, saw its net profits increase only about 50% in the first half of the year, compared with more than 300% in the same period in 2009. Similarly, Goldwind, the second-largest wind turbine producer in the country, saw operating revenues grow 66% year-on-year in the first half of 2010, compared with 216% in the first half of 2009.
To some extent, the wind energy sector has become a victim of its own success with a number of Chinese research institutions noting that China's wind turbine production capacity has surpassed market demand.
Shen Dechang, deputy secretary general of the wind power equipment branch of the China Association of Agricultural Machinery Manufacturers, has said that while the country will easily exceed its target of 30GW of installed capacity by 2020, China's wind turbine plants are expanding too fast for demand.
About 90 of the world's 140 or so wind turbine plants are based in China, many of which only entered the market three or four years ago. This sudden increase in wind turbine production capacity has led to fierce competition and a fall in turbine prices. Today, wind turbines are sold at about CNY 4,600/kW ($686/kW), down from CNY 5,000/kW ($745/kW) at the beginning of the year.
Foreign wind turbine producers have also entered the market, creating further pressure on prices. Two years ago, Vestas sold its turbines for more than CNY 6,000/kW ($894/kW); now they cost CNY 5,200- 5,500/kW ($775-$820/kW). Its aggressive strategy seems to have paid off: Vestas has 400MW of orders between 2011 and 2014.
This ferocious price war has slashed the profit margins of wind-turbine producers and explains why the half-yearly profits of the Chinese companies are so much lower than the levels of 2009.
However, despite falling profits, the industry still appears healthy. Leading turbine manufacturers such as Goldwind, Sinovel and Dongfang Electric have full order books.
Ma Jinru, Goldwind's vice-president, says that as of 30 June 2010, Goldwind had received orders for 3.75GW of turbines, which should keep the company in production for the next one to two years.
Survival of the fittest
As the wind turbine manufacturing sector enters a survival-of-the-fittest stage, companies are not resting on their laurels; they are investing in new research and development (R&D) programmes to explore core technologies and improve their competitiveness.
Zhou Tong, Goldwind's director of strategy and global development, says that prior to 2007 only Goldwind and Germany's Enercon produced direct-drive wind turbines, but recently Siemens and GE have also entered the direct-drive market.
Industry experts believe that in the future, given the choice, wind farm operators will choose direct-drive technology over other systems, leaving Goldwind and others well placed to secure market share. "In face of future competition, we will continue to focus on our technologically competitive direct-drive turbines," says Ma Jinru.
Manufacturers are also eyeing up value-added services such as component maintenance, R&D, and consultancy as additional income streams. Industry experts say that to take advantage of the high added values that offering these kinds of services can deliver, manufacturers must improve core services and develop new ones.
Although earnings from services are relatively small at present - Goldwind generates more than 95% of its profits from selling wind turbines - this is expected to grow in the future.
"As a result of the swift expansion since 2004, there are a large number of wind farms in operation in China so, shortly, a lot of wind turbines will be coming out of warranty," says Zhou Tong. "Therefore, there will be large profits to be made in the wind turbine and wind farm service market in the future.
"In the next five years, service will be a central pillar of our company's development, along with further expansion of other business arms and vigorous development of other service platforms, such as industrial and wind farm investment," he says.
"We think our wind turbine value-added service will grow 40-50% over the next five years," he adds.