China’s $447 Million Solar Subsidy Could Yield 30 Gigawatts In 2019

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Information regarding the immediate future of China’s solar industry continues to be drip fed by the country’s government and experts believe that the current policy draft would amount to subsidies of RMB3 billion (US$447 million) which could support over 30 gigawatts (GW) of solar capacity in 2019.

Last week the Asia Europe Clean Energy (Solar) Advisory (AECEA) published an analysis of the consultation paper published by China’s National Energy Administration (NEA) entitled Work Plan for the Construction of Unsubsidized (Grid-Parity) Projects for Wind & Solar PV. The core premise from the AECEA’s analysis was the expectation that China’s solar market would steadily transition to a subsidy-free market by 2021.

As more information from the NEA is released and revealed, the hopes for a strong year for China’s solar industry rise.

According to several reports, the NEA’s consultation paper hinted at total solar subsidies for 2019 of RMB3 billion, or around US$447 million — which would also include RMB 750 million for residential solar projects.

Further analysis by various groups have also concluded that this level of subsidization could support over 30 GW of new solar capacity in 2019, and as much as 50 GW. Total solar installations, then — including both subsidized and unsubsidized projects — could total over 40 GW (based on the low-end predictions).

Wang Sicheng, a recently retired researcher at the Energy Research Institute of China’s National Development and Reform Commission (NDRC), speaking to PV Tech, said: “If the previous draft was not changed, the total controlled amount of subsidy will be around RMB3 billion (US$447 million), which equals to 60 billion kWh priced at RMB0.05/kWh (US$0.007/kWh).

“Let’s say the average utilization hours are 1,200, it is expected that 50 GW of capacity will be listed as subsidized projects through tendering. This number is quite considerable. Even if subsidy per kWh is controlled at around an average of RMB0.07, there will still be 30 GW of capacity, large enough to maintain the stable development of domestic PV market.”

PV Tech concluded that based on the low-end estimate of 30 GW, in addition to unsubsidized projects, residential projects, and the country’s continued poverty alleviation program, total solar installations for 2019 could reach 40.5 GW. Similarly, Jenny Chase, Head of Solar Analysis at Bloomberg New Energy Finance, explained that its analysis maintains “a forecast of 34 — 44 GW for China’s installation in 2019, backed by a yet-to-be-disclosed policy, ‘cheaper than coal’ solar and a lot of distributed and Top-runner projects.”

However, it is important to note that these figures and estimates are based on draft NEA policies and do not reflect any confirmed policy support for China’s solar industry.

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Joshua S Hill

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