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Is China About To Add 10 GW Of Unsubsidized Solar?

Image: Wikimedia/Daderot

An insider close to China’s National Energy Administration (NEA) divulged last week that the authorities may launch a new quota for distributed PV projects to be installed without a government subsidy.

pv magazine has learned the proposal was thrashed out after talks between the government, the national PV industry body, solar companies and industry experts, and may be imminent.

The new quota is intended to drive 300-500 MW of distributed PV in every province, with bidding to start as early as October. Successful bidders will start construction from around March and must finish by the end of September or December next year.

During the process, branch offices of the National Development and Reform Commission (NDRC) will take a coordinating role, to reduce non-technical costs including land prices, taxes and fees and grid connection charges, with the NDRC guaranteeing grid connection.

If true, the move could help the Chinese market recover ground after the shock of the sudden removal of solar incentives by the Beijing authorities at the end of May – a development which sent tremors around the world.

With 34 provincial administrative regions in China, even a very conservative estimate of the scheme would foresee quotas leading to 8 to 10 GW of new solar being installed.

The coordination provided by the NDRC could also give a significant boost to developers, with the China Photovoltaic Industry Association estimating non-technical costs currently make up more than 20% of project financing, equating to at least CNY0.1/kWh ($0.015). The resulting saving could make China’s distributed PV projects more profitable, even without a governmental subsidy.

Whisper it quietly – China could be coming out the other side of the solar storm.