The Chinese Government's feed-in-tariff mechanisms and rebate programs are fuelling an expected increase in PV installations in the country this year, according to NPD Solarbuzz analyst, Ray Lian. According to the market research firm, China installed 2.75GW in 2011 and is expected to double in 2012 to around 5GW. However, upside potential exists that could mean more that 6GW could be achieved. Solarbuzz claims that there is a 25GW PV project pipeline in China as of the end of February 2012.
‘The national FiT rate for 2012 is CNY 1.0/kWh, which is equivalent to US$0.136/kWh after VAT. With PV system costs in China among the lowest in the world — and still decreasing — this FiT rate should justify project development based purely on IRR calculations. Several provincial governments, such as Shandong and Liaoning, are even offering higher FiT rates to stimulate further demand locally,’ noted Lian in a new format blog section of the NPD Solarbuzz website.
Importantly, Lian noted that PV manufacturers based in China were increasingly looking at the Chinese market for shipments and opportunities to become downstream project developers in the country, which could ease the major issue of overcapacity across the global supply chain.