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Hundreds of Rooftop Solar Projects in China Completed Grid Connection on December 29 as a Result of the Government’s New FIT Announcement

published: 2018-01-05 11:47

On 22 December 2017, China’s National Development and Reform Commission (NDRC) surprised solar photovoltaics (PV) developers by announcing that the feed-in tariff (FIT) scheme for many rooftop solar projects will no longer include a six-month grace period. After receiving this notice, domestic solar companies scrambled to connect their 2017 rooftop projects to the grid by 29 December, the last working day of the year. As a result, hundreds of rooftop projects were reported to have completed their grid connection exactly on that day.

The follow-up actions taken by native solar companies – such as Beijing Enterprises Group Co. Ltd., Astronergy Solar Inc., GCL New Energy Holdings Ltd., Unisun Energy Group, and Changsheng Ridian New Energy Holdings Co. Ltd. – demonstrate that China’s solar PV industry has become adept in responding to unforeseen challenges in the domestic market. NDRC’s statement also shows just how sudden policies can change in China.

Sources among the Chinese investors of domestic rooftop solar revealed that project developers were working overtime from 22 to 29 December. Still, there were some projects that simply had to be left out. This latest FIT announcement from NDRC eliminates the six-month grace period for rooftop projects that are not part of any specifically designated programs. Therefore, the qualification for the 2017 FIT rates hinged on grid connection before 1 January 2018. Projects completed after this cutoff date would get the 2018 FIT rates, which have been set to be much less generous. Without the grace period, most developers of rooftop projects in China will probably not participate in the installation rush that usually takes place just before 30 June. The elimination of the grace period may also hint at other reforms to come.

According to an investor in rooftop solar, individual projects that were already in construction basically had no trouble completing grid connection by 29 December of last year. However, projects that did not make the deadline have a total generation capacity of 100 megawatts. Furthermore, projects that developers had planned to build during the grace period were worth around 300 megawatts in generation capacity. Slated for construction in the first half of this year, these 300 megawatts of projects have now been suspended. Whether they can be resumed during this year’s second half is uncertain.

After receiving the notice from NDRC, Changsheng ordered its upper management team to fan out to project sites across the country. The company then dictated that all members of the management must work day and night to have their rooftop projects connected to the grid by the end of the year. Astronergy was also focused on finishing up nearly 200 megawatts of rooftop projects over the past few days, and most of these were successfully completed by the deadline. Another Chinese developer, Zhonghuan Co. Ltd., was busily connecting a 22-megawatt project in an industrial park on 29 December.

The NDRC’s announcement is part of the Chinese government’s ongoing effort to prevent project developers from deliberately postponing system installation to just before the June 30 deadline. Domestic solar companies, on the other hand, would remember 29 December 2017 as one of the most exhausting day in their experience. According to a preliminary and incomplete estimate, at least 500 megawatts of rooftop solar PV systems were connected to the grid across China on this day. Data from the China’s National Energy Administration show that the country’s cumulative installed capacity of distributed generation (DG) from January to November 2017 came to 17.44 gigawatts. Taking account of the 11-month cumulative installation figure plus the estimates for 29 December and the rest of that final month, China’s newly installed DG capacity for the entire 2017 is projected to exceed 19 gigawatts.

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