Since the government unveiled its “low carbon, green growth” vision in August 2008, the nation’s renewable energy industry has achieved impressive growth. Between 2007 and 2010, the industry’s aggregate sales jumped 6.5-fold, its export revenue surged 7.3-fold and the size of its workforce expanded 3.7-fold.

The industry’s rapid growth prompted major Korean corporations to jump on the clean energy bandwagon. They announced large-scale investment plans one after another. This rush boosted expectations that green energy could emerge as a new growth engine for Korea.

Yet this promising industry is now in crisis amid a drop in worldwide demand for Korean products and increased competition from aggressive Chinese companies.

The global renewable energy industry has suffered a setback due to the prolonged global financial crisis. Recently, fiscally strapped European countries dealt a blow to the nascent industry by scaling back their subsidies for alternative energy producers.

On the supply side, however, competition has intensified as formidable Chinese companies relentlessly ramped up output to undercut their rivals and establish global dominance.

As a result, many prominent clean energy companies, especially solar technology firms, have gone belly up. For instance, three American solar companies ― Solyndra, SpectraWatt and Evergreen Solar ― went bankrupt in recent months. They condemned Chinese companies for their financial wreckage.

Some Korean companies also shut down. Last month, Mirinet Solar, a promising solar cell producer, filed an application for corporate rehabilitation with the court. Many small players in this sector are reportedly operating in the red.

Faced with a negative outlook, large conglomerates are also scrapping or postponing their investments. For instance, Hyundai Heavy Industries has put off its $700 million project to build the world’s largest solar power plant in the United States.

LG Chemical also announced last month that it would consider delaying its plan to invest 490 billion won in its polysilicon plant in Yeosu due to the increased uncertainty in the global photovoltaic market.

As such, the fledgling domestic renewable energy industry is threatened by unfavorable market conditions. In times like these, it is necessary for the government to help the shaky local industry stay afloat until global markets recover.

In this regard, the government’s package unveiled Monday to revitalize the sagging industry came at the right time. As domestic companies reel from slumping global markets and shy away from investment, it is necessary to boost domestic demand for renewable energy to take up the slack.

Under the plan, the government will implement the renewable portfolio standard next year as scheduled. The RPS requires the nation’s five power companies to generate 2 percent of their power output using renewable energy sources.

The power companies can meet their RPS requirements either by using renewable energy sources themselves or purchasing it from private suppliers. Either way, this will boost investment in clean energy.

One notable measure is the government’s plan to apply the RPS to heavy corporate power consumers, such as POSCO and Samsung Electronics, making it mandatory for them to use renewable energy sources for a portion of the power they consume.

This is a good idea as it would both stimulate corporate investment in green energy and lead the companies to think again about their power consumption.

Currently, domestic corporations pay far less for their electricity than households. For instance, POSCO paid 256.7 billion won for electricity last year, about 76.6 won per kilowatt-hour, which is much lower than the 119.8 won per kWh charged for households. This is one justification for requiring corporations like POSCO to invest in renewable energy.

Other measures in the package included scaling up export financing for green energy firms to 10.5 trillion won next year from last year’s 6.6 trillion won. This is designed to encourage domestic companies to advance into risky foreign markets more boldly. The plan also calls for more than doubling R&D spending on clean energy by 2015 from this year’s 710 billion won.

In sum, the domestic renewable industry is standing at a crossroads. It is sink or swim for Korean companies. They should take up the challenge and turn the crisis into an opportunity for growth. They need to take a page from the playbook of Korea’s semiconductor manufacturers.