China To Install 40 Gigawatts Of New Solar By The End Of 2018 Despite Cutbacks

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China has installed a total of 34.5 gigawatts (GW) worth of new solar PV capacity in the first nine months of the year, according to figures published last week, with expectations that figure will hit 40 GW by the end of the year, despite significant cutbacks to the country’s solar plans.

2018 has been a tumultuous year for the Chinese solar industry. The opening months of the year saw analysts expecting China to exceed its 2017 capacity levels, which saw the country install 52.83 GW in a year which resulted in 98.9 GW worth of new solar around the world. Almost immediately analysts started predicting 2018 capacity installations would finally surpass the 100 GW barrier, but that soon came to naught as, in June, the Chinese Government announced an effective cap on new solar projects and a reduction in the country’s solar Feed-in Tariff (FiT).

Predictions for China’s 2018 capacity installations plummeted, with Wood Mackenzie projecting that China’s capacity forecast could drop by as much as 40%, down to 28.8 GW from an original prediction of 48 GW, and the Asia Europe Clean Energy (Solar) Advisory (AECEA) downgraded its original forecasts for Chinese solar additions in 2018 from in the range of 40 GW to 45 GW down to between 30 GW and 35 GW.

Fast-forward a few months and China’s National Energy Administration (NEA) published figures for the country’s solar industry over the first 9 months of 2018, which apparently saw a total of 34.5 GW of new solar capacity brought online, and predicted that figure would increase to 40 GW by the time the year is over. This brings China’s total solar PV capacity up to 164.74 GW, made up of 117.9 GW worth of utility-scale solar and another 46.8 GW worth of distributed solar.

New Chinese solar across the first 9 months represented a 20% drop over the previous year’s first 9 months. Breaking down by type, the first 9 months saw a total of 17.4 GW worth of utility-scale solar and 17.14 GW worth of distributed solar.

However, despite what will certainly end up being a disappointing 2018 for China’s solar industry, the future is not all grim — depending on who you ask.

In September, China’s NEA announced plans to phase out power generation subsidies — which have put a tremendous strain on the country’s financial resources — and will provide technological and policy support for renewable energy technologies to help them reach “grid price parity” and begin to compete against other technologies on their own. This was apparently confirmed quietly last week by the NEA which confirmed that it intends to provide policy support, which in turn helped shares in China’s solar companies to surge. Specifically, according to the official Shanghai Securities Journal, the NEA held a solar power development meeting and stressed to companies that solar remains a priority for the Chinese Government.

PV Magazine was unimpressed with comments made by China’s Photovoltaic Industry Association (CPIA) regarding the future of the country’s solar industry, which PV Magazine’s Vincent Shaw concluded seemed to have “little basis — other than optimism.” Specifically, CPIA’s Vice-Chairman and Chief Secretary Wang Bohua has stated that 2019’s solar figures will remain largely unchanged. However, not all agree with Shaw, including Frank Haugwitz, Director of the AECEA, who told me via email that he expects China’s annual capacity installations to range between 40 GW to 50 GW through to 2020, meaning that “we are looking at sound growth til 2020.”

“CPIA’s figures are solid,” Haugwitz said. “40 GW is doable, [we] too are [predicting] 40 GW for the full year. In addition to the national level, a lot is happening on the local level too, i.e. local support policies were released after May 31. That means the ball kept rolling, in addition to top-runner. Given that distributed policy is centrepiece of the national energy policy, local governments favoured this.”

Of course, if the NEA chooses to run with a lower 2020 target increase, then China might only see annual installations of 20 GW, so it all depends on what the NEA decides to do in the next days or weeks.

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Joshua S Hill

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