According to China media news reports ahead of official statements expected from China’s National Energy Administration (NEA), the new target for PV installations in 2015 is to be set at 17.8GW, up from the 2014 initial target of 14GW.
The 14GW target, initially set at the beginning of 2014 was seen as an annual ceiling for several years to come, supported by central government as well as provincial government incentive schemes and a slight increase in the target from 12GW set in 2013.
However, a key difference from previous years was the inclusion of installation quotas for each province and further broken down into distributed generation (DG) and utility-scale PV installations.
It has been well documented that the 8GW DG requirement was too aggressive and unlikely to come close to being met. This was compounded by delays in regulatory requirements for DG not being fully disclosed until mid-2014, despite being given a higher quota priority. The knock-on effect led to significant delays in DG project planning and deployment, and targets set for year-end were missed by a wide margin.
The NEA had said early in 2015 and later in February that grid-connected PV totalled 10.6GW in China for 2014, while DG project installations accounted for around 2GW.
However, market research firms had guided installation figures several gigawatts higher and have yet to revise downwards previous projections for 2014. General consensus in the last few months has been that China installed around 12GW in 2014, still missing targets under the quota system, yet higher than NEA numbers.
Yet, the heavy rush to complete PV projects in China in the fourth quarter of 2014 meant an as yet unknown number failed to be completed as well as grid connected by year-end.
This was highlighted by several major tier-one Chinese PV manufacturers reporting lower than expected fourth quarter shipments due to project delays in the fourth quarter.
Therefore it is possible that several gigawatts of PV installations having started in late 2014 would be only completed or grid connected within the first quarter of 2015.
The significant overhang from 2014 would therefore consume a decent percentage of the installation quota for 2015, should the 14GW quota system as previously expected be retained, resulting in an actual decline in PV installations in 2015.
The expected move by the NEA to raise the installation target to 17.8GW for this year is also expected to be accompanied by the removal of a specific DG quota altogether, suggesting challenges in the DG market would not be resolved sufficiently to provide a DG quota figure that could be realistically met.
Indeed, the removal of the DG quota could be seen as a positive for provinces, which would better be able to match local project needs to the quota, rather than being forced to meet unrealistic DG quotas for the year.
Finally, the actual 17.8GW target for 2015 could be the giveaway to the overhang of projects in 2014 as previous years quotas were refrained from using decimal points.
However, it remains unclear at this time whether the almost 4GW 2015 increase in installation targets would result in a comparable increase in corresponding product shipment growth within China or whether the higher target merely reflects gigawatts of PV project overhang from 2014.