Representatives of the Taiwan Photovoltaic Industry Association (TPVIA) held a press conference on September 11 to voice their concerns about the future development of the domestic solar market. Those companies that attended the event are the major actors across the different sections of the island’s supply chain for PV technologies (e.g., upstream materials, cells, modules, and whole systems). During the press briefing, TPVIA stated that Taiwan’s current target of reaching 20GW for installed PV capacity by 2025 is unattainable because the regulatory regime is quite unfavorable to the operations of domestic solar enterprises. The association called for changes or implementation delays for some measures so that its members have time to adapt.
Taiwan’s government has given renewable energies an increasingly important role in domestic electricity production. According to the government’s overall target for energy transition, renewable energies, coal, and natural gas will respectively comprise around 20%, 30%, and 50% of the island’s energy mix by 2025. Sam Hong, chairperson of PV product manufacturer URE, told reporters at the conference that although the government has set a very ambitious goal, the grid system of the island could revert back to relying on traditional thermal generation or nuclear power because of regulatory obstacles.
On July 7, Taiwan’s Council of Agriculture (an agency of the executive branch), announced that it will take over the responsibility for reviewing and approving the change in land use from local governments with respect to the transformation of farmlands into sites for new PV power plants. The new rule, which covers parcels of agricultural land sized 2-30ha, reasserts stricter control for land use in order to prevent too many independent farms from being converted into PV power plants. As for parcels of agricultural land and hillside land smaller than 2ha, they are also prohibited from turning into spaces for the deployment of PV systems. Exceptions are allowed for certain cases such as the land in question being surrounded by non-agricultural lands or lands with rough natural terrains. PV systems can also be installed on small plots of agricultural land that are fragmented and mixed with tracts of land designated for other uses.
The updated rule on land use is a bombshell for domestic solar enterprises and has aroused a lot of debates pertaining to the government’s policy directions in the development of renewable energies and the maintenance of electricity supply. The Council of Agriculture has responded that the installed PV capacity related to the adoption of PV in aquaculture (e.g., solar canopies above fish ponds) and agricultural facilities (e.g., solar panels on granaries) is projected to reach 3GW by 2025.
Nevertheless, Hong said that the government appears to be too optimistic in its assessment. He noted that the demand for “aquavoltaic” is constrained by the willingness of aquaculture business owners to adopt PV and the high cost of setting up distribution lines. In contrast to the Council’s estimation, Hong forecasts that the installed capacity contributed by the aquavoltaic segment will total no more than 1-1.5GW by 2025. Regarding rooftop solar, Hong said it is a viable market segment, but its contribution by 2025 will be within 0.5-1GW. Not many projects involving rooftop solar or aquavoltaic can reach the utility scale.
At the press conference, Hong also asserted that Taiwan’s solar industry will not be able to reach even half of the capacity target for 2025 if the government remains inflexible with respect to the imposition and enforcement of certain regulations. At most, the installed PV capacity of the whole island is projected to total just 8-10GW by that year.
Speaking for the industry, Hong reiterated that the construction of new PV power plants will not cause environmental damages like deforestation or put small farms out of business. Most of the new solar projects that are under development are either on lands that are not suitable for farming or designed to complement the operations of the existing farms located at their sites. Hong warned that failure to reach the 2025 target could deal a major blow to the government’s efforts in pursuing energy transition. This setback, in turn, could lead to a crisis not only in the maintenance of the island’s energy security but also in the development of the domestic solar industry.
Doris Hsu, chairperson and CEO of silicon wafer manufacturer SAS, told reporters at the press briefing that the industry will be aggressive in developing new aquavoltaic and rooftop solar projects, but the growth in these two segments will not be enough to achieve the 20GW target. Hsu added that the government needs to formulate a land-use policy specifically for solar projects and establish an agency that could streamline the application process for new projects.
Presently, 250 companies around the world have joined the RE100 initiative and pledged to source 100% of the electricity that they use from renewable energies by a target date. Therefore, their supply chains will also have to undergo a similar transformation as well. All in all, Taiwan’s industries need to recognize the imperative to adopt renewable energies.
TPVIA mentioned other regulatory hurdles such as the new rules on runoffs and outflow control and the recent amendments to the Coastal Zone Management Act. The association stated that its members are willing to adhere to the updated regulations, but they are hoping that the government will provide a grace period to allow them to revise the internal rates of return of the projects they are working on. They are also hoping that the government will extend the applicable period of the current feed-in tariff scheme so as to head off any potential disputes arising from the effect of tightening regulations on the financial viability of local solar projects.
Fred Yeh, president of PV product manufacturer Motech, declared that the application process for building a PV power plant is too time-consuming due to the amount of red tapes. He, too, asked the government to create an agency that has the sole authority to manage the development of solar projects. In the procedural aspect, Yeh said there ought to be a one-stop window for submitting project applications. Moreover, the application review period ought to be shortened and have a fixed end date. A new project should go ahead immediately if there is no opposing opinion expressed during its application review.
Based on the government’s target, Taiwan’s installed PV capacity is supposed to grow by 2.3GW this year to a total of 6.5GW. However, the actual amount of newly added capacity is expected to be much lower due to the recent changes in the regulatory regime, including the revisions in the land-use policy. According to the department of green energy research under market intelligence firm TrendForce, installations of PV systems in Taiwan are estimated at just 562MW for the first half of 2020. To meet the government’s target, installations during the year’s second half will have to reach around 1.8GW. On the whole, the possibility of hitting the annual quota of 2.3GW is extremely low.
(News source: TechNews. Photo credit: Taiwan Photovoltaic Industry Association.)