China May Lower the Distributed Generation PV Installation Target

published: 2014-03-04 18:21 | editor: | category: News

Last month, a China’s official announced that the government has set the PV system installation target of 14GW in 2014, including 8GW of distributed generation (DG) PV system. However, the second target may be lower by at least 2GW to 4~6GW.

As the installation schedule delays, China’s National Energy Administration (NEA) plans to start investigating on the processes at the end of first or second quarter this year. An insider of Chinese PV industry said that most of the local manufacturers have found it difficult to meet the 8GW goal, only one month after the official announcement.

DG systems are usually hard to get financing in China. Adding risks like high costs and low profits, it is a huge challenge for manufacturers to have DG systems installed. In China, there are 18 DG system demonstration projects, accounting for 1.8GW in total, and only about 300MW has been started building. “Actually, most of these projects are halted without any construction,” said the insider.

An analyst of Solarbuzz explains in a PV news’ report that DG installation have to overcome a series of complicated problems include property rights of rooftops, agreements regarding energy managing and various technical cost under diverse environment and requirement. Although China’s NEA and Ministry of Finance have initiated some programs to support DG system, it’s still not as optimistic as the government’s estimation.

“The ROI of DG system is not really beneficial,” said Samuel Yang, the CEO of Hareon Solar, a Chinese PV manufacturer. “Risk of return would appear once the rooftops installed DG system being reconstructed. As a result, I think DG system is unable to become a commercial sector at the moment.”

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