Chinese manufacturers make about 50 million solar panels a year — over half the world’s supply in 2010 — and include four of the world’s top five solar-panel manufacturers.

The industry elsewhere has been doubling in size every two years, and Chinese manufacturers have done even better, doubling their production roughly every year.

They have succeeded in large part because it’s faster and cheaper for them to build factories, thanks to inexpensive, efficient construction crews and China’s streamlined permitting process. The new factories have the latest, most efficient equipment, which helps cut costs. So do the efficiencies that come with size.

From now on, the best way for Chinese manufacturers to lower the cost per watt of solar power may not be by lowering manufacturing costs but, instead, by increasing the number of watts each panel generates.

In 2010, when the U.S. secretary of energy, Steven Chu, gave a speech to the National Press Club laying out his case that the United States was falling behind in advanced manufacturing, Suntech Power was his Exhibit A. He had toured its factory, and he was impressed by what he’d seen. “It’s a high-tech, automated factory,” he said. “It’s not succeeding because of cheap labor.” Not only that, he noted, but Suntech had developed a type of solar cell with world-record efficiencies.

Also see: Can We Build Tomorrow’s Breakthroughs? Manufacturing in the United States is in trouble. That’s bad news not just for the country’s economy but for the future of innovation.