The Ministry of Finance recently issued the "Notice on Issues Related to Distributed Photovoltaic Power Generation," which decided to exempt renewable energy tariffs for distributed photovoltaic power generation, national major water conservancy project construction funds, large and medium-sized reservoir resettlement support funds, and rural electricity net loan repayment funds. This move is seen as a significant step in promoting the development of clean energy and reducing the financial burden on local communities.
In the days leading up to this policy announcement, the National Energy Administration released the "Interim Measures for the Management of Distributed Photovoltaic Power Generation Projects." It emphasized that grid companies will transfer state subsidy funds monthly for projects that qualify for subsidies. Additionally, surplus electricity generated can be sold directly within localized areas, such as industrial parks or economic zones, allowing for more efficient use of locally produced solar power.
Earlier in November, the National Energy Administration announced the 2014 PV scale development pre-arrangement plan, projecting a total installed capacity of 12 GW across 29 provinces, with 8 GW coming from distributed photovoltaics and 4 GW from ground-mounted systems. Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, highlighted that this shift marks a clear focus on distributed solar power, signaling a potential wave of rapid growth in the sector. However, he also noted that achieving the 8 GW target may prove challenging due to logistical and administrative hurdles.
Despite growing interest in self-built rooftop solar systems, many individuals still find the process complicated and time-consuming. Lin pointed out that while some people are enthusiastic about installing their own systems, the bureaucratic procedures and unclear financial returns make it difficult for most to take action. He described these early adopters as “fever friends,†suggesting that widespread adoption is still far off.
Meng Xianyu, vice chairman of the China Renewable Energy Society, added that the main push for distributed photovoltaic development is now focused on large-scale projects in industrial zones, factories, and mines, rather than individual households. While residential installations serve as models, they are not the primary drivers of growth.
However, the implementation of policies has been uneven. Many of the first 18 national demonstration areas for distributed photovoltaics have not progressed as expected, and even those outside the designated zones face delays. Although the national subsidy rate of 0.42 yuan per kWh sparked a small surge in applications, unclear operational rules have left investors waiting for further guidance.
Industry experts stress that while supportive policies are important, real-world implementation is crucial. Jing Jing, global brand director of Jingke Energy, emphasized that companies need certainty in grid connection, electricity sales, and payment processes. Without clear execution, investors remain cautious.
The latest notice from the National Energy Administration aims to clarify procedures for project approval, grid access, and subsidy distribution. It encourages various stakeholders, including power users, investment firms, and energy service companies, to participate in distributed solar projects. The policy promotes an operation model where power is used locally, with surplus electricity fed into the grid and managed by utility companies.
According to the 2014 development plan, the shift toward distributed photovoltaics is evident, with 8 GW of new installations expected—surpassing ground-based systems for the first time. This trend reflects a broader strategy to reduce reliance on large-scale solar farms, particularly in the west, where issues like land use and grid integration have raised concerns.
The quota system introduced in the policy is another key highlight. Instead of applying nationwide, projects must align with local grid capacities and layout plans. Provincial governments are tasked with setting annual targets and streamlining procedures, including exemptions from certain licensing and environmental assessments.
Looking ahead, industry analysts believe that while the photovoltaic manufacturing sector has begun to recover, full profitability may take two to three years. Although demand for solar modules has increased, overcapacity and inventory levels remain challenges. Nonetheless, the expansion of the distributed market is expected to provide a strong boost to the industry, with most companies anticipating profitability in the near future.
Overall, while the policy framework is promising, its success will depend on consistent implementation, streamlined procedures, and continued support from both government and private sectors. Only then can the full potential of distributed photovoltaic power be realized.
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