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China issues new policy to boost distributed PV market

published: 2014-09-12 10:47

The China National Energy Administration announced a new policy on September 4 aimed at bolstering the distributed solar photovoltaic (PV) market. “This new policy will loosen current regulations, which will give the market a needed push,” said Arthur Hsu, a research manager at EnergyTrend, a subsidiary of the Taiwan-based market intelligence firm TrendForce.

China has high hopes for distributed PV. This year, it aims to add 8 gigawatts of solar energy for small users and 6 gigawatts for larger projects, which would make it the largest market for photovoltaic. Yet it is struggling to reach those goals.

China’s distributed PV market must overcome three main hurdles – financing, grid connection and electricity price subsidies, Hsu said, adding that Beijing’s new policy addresses all of those issues. Indeed, the new policy will encourage financial institutions to offer discounts on loans and longer loan terms for distributed PV projects. That will help alleviate financial strain on firms investing in distributed PV. Additionally, the new policy is intended to expand the usage of solar panel installations in public infrastructure. Under the policy, solar projects will also be connected to low-voltage grids built on deserted areas, hills, agricultural greenhouses, lakes and ponds. At the same time, China’s new policy also aims to stimulate innovation in the distributed PV industry, especially in the combination with the greenhouse gas emissions and carbon trading, and the construction of the solar leasing mechanism. Given China’s ambitions to become a major player in carbon trading, investors have cheered the new policy.

Thus far, China has only assembled 1 GW of distributed PV this year, or 12.5% of its 8 GW target. “To reach its goal for 2014, China will need to assemble 2 GW per month in the next 4 months,” Hsu said. “That’s good news for global solar manufacturers.” Yet Hsu cautioned against excessive optimism about the policy. “It is beneficial for the development of China’s distributed PV market – that’s for sure,” he said. “But we need to wait and see if it is capable of driving growth in the near term.”

This week’s price quotes

Buoyed by the China new policy and a positive forecast for the fourth quarter, Chinese manufacturers all raised their prices. Overall, prices increased 0.44% to US$20.34/kg. Silicon wafer prices also felt the effects of the new policy, as Chinese producers raised prices, pushing the whole market up. High-efficient multi-Si wafer increased 1.52% to US$0.934/piece, and normal-grade one increased 0.6% to US$1.17/piece. Cells and modules, driven by domestic demand and orders from Europe, America and Japan, saw prices continue to rise 0.73% to US$0.335/watt. China cells increased 0.97% to US0.312/watt. Modules increased 1.07 % to US$0.569/watt.

(Photo Credit: Wikipedia)

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