Chinese government offers glimpse of path to post-subsidy solar

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email
The proposals are being circulated among the industry for feedback.

The first glimpses of China’s post-subsidy solar deployment landscape have been revealed by the country’s National Energy Administration (NEA).

In draft proposals being circulated around the sector, and seen by PV Tech, the NEA has signalled a clear preference to incentivise renewables in locations where they can operate without subsidy. The state-administered feed-in tariffs, capped in May, would be set aside with provincial governments in such parts of the country, encouraged to provide the technical and regulatory support required to spur deployment. They would be permitted to offer their own feed-in tariff (FiT) scheme if they so wished.

Developers of these projects would be responsible for finding their own offtakers.

A regional trading platform for solar and wind power has also been mooted.

Grid distribution companies in locations with the potential to achieve parity with coal generation will be under increased scrutiny to host the additional capacity. Transmission infrastructure in the deserts of west China has been responsible for high levels of curtailment of solar generation in the past.

“[The]provincial market makes sense. Without subsidy, renewables will be more involved in and impacted by power markets, which are mostly operated at the provincial level,” BNEF analyst Yvonne Yujing Liu told PV Tech.

“Under the current power mechanism, grids are unlikely to be very friendly and supportive to renewables, until they become significantly cheaper than operating conventional power. That may only happen around 2025, according to our long-term economics forecasts.

“The major problem is that the NEA has not clearly define a business model for subsidy-free projects. This definition is subject to change under the ongoing power market reforms. So there are lots of uncertainties on generation hours and prices for these projects,” she added.

In May the government said new applications for support for utility-scale solar plants would be blocked for the rest of the year. Deployment forecasts for China in 2018 were immediately cut by around 10GW.

Additional reporting by Carrie Xaio

Credit: Panda Green Energy.
6 October 2021
The future is bright for a new era of US solar and storage, and the 8th annual Solar & Storage Finance Summit will provide opportunities to discuss solutions to the industry’s challenges and provide a networking platform designed to bring together the top minds in the industry to do business. With a mix of high-level, informative presentations and panels, a stellar cast of speakers and audience members with deal-making capacity, the 2021 edition of the event will be a sell-out success.

Read Next

June 18, 2021
Spanish utility Acciona has set a price range for its planned initial public offering (IPO) of its renewables division of up to €29.76 (US$35.36), potentially valuing the business unit at as much as €9.8 billion (US$11.6 billion).
June 16, 2021
A round-up of the latest stories from the US solar market, featuring news of Sunnova’s latest securitisation, Ameresco’s installation of solar at a US Air Force Base and Extensible Energy’s latest capital investment.
June 15, 2021
The confidence of renewable energy investors and developers stands at an “all-time high”, a new report by the American Council on Renewable Energy (ACORE) claims, however investment must surge in the coming years if the US is to meet decarbonisation goals.
June 14, 2021
Mozambique-based coal operator Ncondezi Energy has announced a joint venture (JV) with South African-based NESA to target South Africa’s C&I solar and storage markets.
June 8, 2021
A round-up of the latest project news, as Mytilineos is chosen as EPC for a project in Uzbekistan, Clenergy forms a deal with the local Kongtong government for 150MW and CleanCapital teams up with CI Renewables for a 29MW portfolio.
June 2, 2021
The first phase of GCL System Integration Technology's (GCL-SI) 60GW module factory in Hefei, in China’s Anhui Province, is on track to start production this September.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
July 6, 2021
Solar Media Events
August 24, 2021
Solar Media Events, Upcoming Webinars
October 6, 2021