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China Installs 5.2 Gigawatts Of Solar As Government Unveils 2019 Feed-in Tariffs

China’s National Energy Administration announced Monday that a total of 5.2 gigawatts (GW) of solar was installed during the first quarter while, at the same time, the Price Bureau of China’s National Development and Reform Commission finally published its solar Feed-in Tariff policy for 2019 on Tuesday. 

China’s National Energy Administration announced Monday that a total of 5.2 gigawatts (GW) of solar was installed during the first quarter while, at the same time, the Price Bureau of China’s National Development and Reform Commission finally published its solar Feed-in Tariff policy for 2019 on Tuesday.

The Chinese National Development and Reform Commission’s Price Bureau published a notice on Tuesday regarding “Improving Issues Related to Feed-in-Tariffs (FIT) for Solar Photovoltaic,” according to the Asia Europe Clean Energy (Solar) Advisory (AECEA), which published an analysis to journalists on Wednesday. China’s government has been mulling the specifics of its solar Feed-in Tariff (FiT) for 2019, leading to a relatively weak first quarter and causing some analysts to lower their full-year installation predictions.

China’s new solar FiT were hinted at in January, but have only now been confirmed and are only set to become effective on July 1. For centralized ground-mounted solar systems in Region 1 RMB0.40 per kilowatt-hour (kWh), for Region 2 RMB 0.45/kWh, and for Region 3 RMB 0.55/kWh. (China introduced its regional bracketing back in 2013, where Region 1 accounts for mostly northern China and Inner Mongolia, Zone 2 for mainly western and central China, and Zone 3 for the remainder of the country.) The Feed-in Tariff for “village-level” poverty alleviation solar PV power projects remain unchanged at RMB/kWh 0.65, 0.75, and 0.85 for Region 1, 2, and 3 respectively.

The FiT for Commercial and Industrial (C&I) distributed solar PV power projects designed for “self-consumption + excess power feeding back into the grid” sits at RMB0.10/kWh. However, these distributed solar PV projects which are seeking a 100% feed-in mode of operation will be subject to the same FiTs applied for centralized ground-mounted systems.

All of the listed FiTs (with a possible exception from C&I with self-consumption projects) have been clearly stipulated as being subject to competition regardless of type and operation mode, as China’s central government and local authorities are expected to conduct auctions which will result in a unified national bidding process from which the National Energy Administration (NEA) will eventually select the most competitive projects.

Meanwhile, residential solar PV systems — regardless of whether or not the projects are for self-consumption + excess feed-in or feeding 100% into the grid — are entitled to a Feed-in Tariff of RMB 0.18/kWh and are included in the 2019 FIT subsidy budget.

In a separate announcement, China’s NEA confirmed that only 5.2 GW of new solar capacity was installed in the first quarter of 2019, made up of 2.4 GW of ground-mounted solar and 2.8 GW of distributed generation projects. This confirms figures published in late April by China’s National Renewable Energy Center, which highlighted the 5.2 GW of new capacity was down 46% on the same quarter a year earlier.

In light of this weak first quarter installation figure and an anticipated continued weakness through to the introduction of the new Feed-in Tariffs on July 1, AECEA has lowered its full year guidance from between 35 GW to 40 GW down to between 32 GW and 34 GW.

AECEA also raised concerns as to how projects installed between July 1 2018 and July 1 2019 — a period without a set FiT — will be dealt with, which AECEA believes to amount to around 28 GW or 30 GW. “It is assumed that they will be included in the 2019 RE subsidy catalogue (RMB 2.25 bln), but what might be the applied FIT?” asks AECEA’s Director, Frank Haugwitz. “AECEA expects that within the remaining weeks till the end of June, NEA will release further policies designed to address these and other several outstanding issues. During this period demand is expected to remain weak, however Q3 + Q4 an installations rush is being anticipated, because by then NEA should have released the list of projects eligible for FIT support in the running year.”

 

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