PV Subsidy in China May Lead to Investment Boom in PV Power Plants

published: 2013-09-03 18:58 | editor: | category: News

Sinking in the gloominess over the past two years, PV industry has come to life again due to many subsidy plans provided by the government. On August 30th, The National Development and Reform Commission of People’s Republic of China have confirmed the subsidy standard for distributed PV to be RMB0.42/kWh, which is 20% higher than the RMB0.35/kWh proposed in the draft. Some people project that the accelerated gain will boost the power plant construction, and thus more people will invest in solar system installations.

The amount of solar system installation is estimated to reach 6GW-7GW by 2013, about 55% rise compared to the 4.2GW in 2012. In addition, the amount of solar system installation may be above 10GW in 2014 and may be above 35GW by 2015 based on the plans.

The National Development and Reform Commission of People’s Republic of China have regulated FiT according to different regions. Based on each region’s PV resource condition and construction cost, PV power plants will be divided into three types of resource areas while FiT is set as follow for each resource area - RMB0.9/kWh, RMB0.95/kWh, and RMB1/kWh. As for PV distributed generation, the subsidy will be given out according to the amount of power generated. The standard subsidy is RMB0.42/kWh.

The PV subsidy provided by the government beforehand belonged to constructive subsidy which means that investors may apply for the subsidy during the construction. However, subsidy plans currently proposed by the National Development and Reform Commission of People’s Republic of China aims to encourage more power generation, and thus will be subsidized based on the actual amount of power generated.

Experts indicate that PV electricity price in China is about RMB1/kWh while thermal power price is RMB0.4-0.5/kWh. Once being subsidized by the government, the competitiveness for solar energy will raise significantly.
 

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