China’s New Policy for Distributed Generation Officially Unveiled

China has been planning to introduce a series of new policies to encourage distributed generation (DG) installations as well as to deal with related obstacles since June. The National Energy Administration (NEA) revised down the yearly DG installation target from 8GW to 5GW in August and has unveiled the new policies in early September.

The new policies, being collected in NEA’s “Announcement” regarding DG installations, suggest that the Chinese government will continue to support DG installations in the nation. The Announcement’s contents cover issues from the new definition of DG systems to new supportive programs. The revelation also deepens confidence in China’s 5GW DG installation target.

Key policies in the Announcement are:

New DG definition: According to the new definition, solar PV systems installed on abandoned lands, unused slopes, canopy for agricultural uses, fish ponds and waters will all be regarded as DG systems. PV systems with capacity lower than 20,000 kW are also recognized as DG systems.

Arrays of Projects:When registering DG projects, owners can define their projects as for self-use or for grid connection. The two arrays of DG projects will respectively be applied to different subsidy schemes.

• For self-use: DG systems owners can sell back their surplus power to power company and receive a suitable subsidy. Nonetheless, when the owners’ power consumption is too low to reach the financial balance, they can choose to connect to the grid and sell back all of the power to receive local FiT for DG systems.
• For grid connection:DG systems that are completely connected to the grid can receive local FiT.

Financial Supports: NEA requests banking institutions to offer favorable financial programs to DG installations. Financing service platforms established by local governments and banks are appreciated. In addition, soft loan programs and fiduciary loans shall be designed and introduced to DG installations.

Power Transaction: The new policies allow DG system owners to sell generated power directly to customers. In demonstration zones, DG owners can sell power to certified customers by certain agreed prices. The zone’s grid company shall help transmit the electricity and calculate the power fees.

Aside from the aspects mentioned above, the Announcement points out issues about management, technology and research, industrial development, monitoring and public services. The full content has already been published on NEA’s website.