China Set To Reform DG Solar Policies To Boost Installations

Posted by SI Staff on August 19, 2014 No Comments
Categories : New & Noteworthy

While China's National Energy Administration (NEA) has lowered its installation target for this year from 14 GW to 13 GW, IHS reports that upcoming policy initiatives will help remove barriers for distributed generation (DG) solar.

IHS notes that while ground-mount PV systems continue to dominate China's solar market, with 8 GW of new capacity expected this year, DG installations are primed to accelerate rapidly due to a combination of market forces and government policy.

IHS says conditions for DG in China should improve, forecasting nearly 5 GW to be completed this year. The NEA reportedly is mulling changes to its DG policies, which IHS says will drive development once ratified. Some of those key changes are as follows:

  • Expanding the definition of eligible DG projects to include all systems up to 20 MW – not necessarily roof-mounted – that connect to a low-voltage grid;
  • Increasing the grid voltage limit of eligible DG systems 10 kV to 35 kV, opening up incentives to a major portion of ground-mount PV projects;
  • Doubling DG subsidies to bring them more in line with feed-in tariff rates;
  • Establishing financing programs to enable government, banks and companies to offer DG developers easier access to capital; and
  • Welcoming fund, insurance, trusts and industry capital into a PV industry investment fund.

Along with the shift from large-scale solar to DG, IHS has identified a sharp increase in shipment of small string inverters in the first half of the year (H1'14), marking a trend away from large central inverters. In H1'14, Huawei's string inverter shipment recorded over 500 MW in China. Nevertheless, IHS predicts that central inverter suppliers such as Sungrow and TBEA will continue to dominate the overall market as ground-mount systems remain the majority.

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