The Ministry of Finance recently issued the "Notice on Issues Related to Distributed Photovoltaic Power Generation," which announced that several government fees will be exempted for distributed photovoltaic power generation. These include renewable energy tariffs, national major water conservancy project construction funds, large and medium-sized reservoir resettlement support funds, and rural net loan repayment funds. This move aims to reduce costs and encourage broader adoption of solar energy at the local level.
In the days leading up to this policy announcement, the National Energy Administration also released the "Interim Measures for the Management of Distributed Photovoltaic Power Generation Projects." It outlined how grid companies would handle subsidies, including monthly transfers of state subsidies and settlements for surplus electricity. In areas with independent power supply systems, such as economic development zones, surplus electricity can be directly sold to other users within the same area, promoting more flexible and efficient energy use.
In early November 2014, the National Energy Administration announced its PV scale development pre-arrangement plan. It projected a total installed capacity of 12 GW across 29 provinces, with 8 GW dedicated to distributed photovoltaics and 4 GW to ground-mounted projects. Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, noted that this shift signals a clear focus on distributed solar power. However, he also pointed out that achieving the 8 GW target for distributed installations next year may prove challenging due to administrative and logistical hurdles.
Despite growing interest in self-built solar systems, many individuals find the process complicated and time-consuming. Lin Boqiang explained that while some people have started building their own rooftop systems, the bureaucratic procedures and unclear financial returns make it difficult for average citizens to participate. He noted that most self-built systems are still niche and not yet mainstream.
Meng Xianyu, vice chairman of the China Renewable Energy Society, emphasized that the main drivers of distributed PV growth are now large-scale developments in industrial parks, factories, and mines rather than individual homeowners. While the initial wave of distributed PV applications was promising, progress has been slower than expected, especially in regions not part of official demonstration zones.
Recent policies aim to streamline the approval process, simplify grid connection procedures, and clarify subsidy mechanisms. According to the "Interim Measures for the Management of Distributed Photovoltaic Power Generation Projects," various entities—such as power users, investors, and energy service companies—are encouraged to develop distributed PV projects. The new operational model allows for "spontaneous use, surplus power access, nearby consumption, and grid regulation."
Grid companies are required to issue network access approvals within 20 working days, with an extension to 30 days for multi-point connections. For projects receiving subsidies, the grid will transfer state funds monthly and settle surplus electricity tariffs accordingly. In certain areas, like economic development zones, surplus power can be sold directly to other users, enhancing local energy efficiency.
The 2014 PV development plan marks a significant shift, with distributed PV targets surpassing those of ground-mounted systems for the first time. This reflects a strategic move by the government to prioritize decentralized solar energy solutions. Industry experts believe this transition is essential for sustainable growth, as large-scale ground projects face challenges related to land use, transmission, and market demand.
While the policy framework is encouraging, implementation remains critical. Many investors remain cautious, waiting for clearer guidelines and more reliable financial returns. Jing Jing, global brand director of Jingke Energy, highlighted the importance of practical execution, noting that companies need certainty in grid connection, electricity sales, and payment processes.
Overall, the future of the PV industry looks promising, but it will take two to three years for the sector to fully recover and become profitable. As the focus shifts toward distributed systems, the manufacturing sector is expected to benefit from increased demand. However, maintaining a balanced and sustainable approach remains key to long-term success.
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