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Another Key Solar PV Period In China Starts This Year

This year is the start of another key period in China’s development of its solar PV market, IHS Markit reports. 2021 is the first year of the 14th five-year plan and the first calendar year after President Xi Jinping announced the nation’s carbon emissions commitment, and the forecast reflected strong growth after the publication of China’s new carbon target.

China dominated global solar PV installations between 2011 and 2020. In 2020, China added 48.2 gigawatts (GW) of additional solar capacity, and its National Energy Administration (NEA) announced 253 GW of cumulative solar connections from 2011–2020. Around 70% of that capacity came from utility-scale projects, which were driven by feed-in-tariffs (project owners paid a certain amount for each watt-hour of energy produced).

During the 13th five-year plan, which was 2016 through 2020, demand for solar grew significantly. There was a 5× increase of solar connections (210 GW) from the 12th five-year plan. IHS Markit predicts that mainland China will continue to be the largest solar market globally in terms of installation during the course of the next five-year plan.

The article noted policy support played a significant role in the industry’s size, business model, timeframe, speed of installations, and supply chain movement. These policy schemes have followed a few key stages up till now. The Gold Sun Program 2009–2013 was put in place at the beginning of the 12th five-year plan as the key national solar policy. Another policy focus was building-integrated PV (BIPV) projects during the same time period, which provided an important solar system subsidy (CNY/W). Another way policy support took place was through aforementioned feed-in tariffs.

“After July 2013, the State Council of China released ‘The notice to promote the healthy development of the solar industry,’ which provided guidelines on the solar power generation subsidy (CNY/kWh), a feed-in tariff for solar power generation.”

However, by the end of the 13th five-year plan, solar PV had matured a great deal and there was more focus on unsubsidized projects. This was a result of technology advancements and financial incentives in the solar industry successfully lowering the cost of solar in the previous decades.

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2021 Expectations

This year will become another record-breaking year for solar PV in China, IHS Markit and basically everyone else is expecting. IHS forecasts 61 GW of solar additions, which translates to an annual installation growth rate of 26% year on year. There are five main demand drivers:

  1. The unsubsidized program.
  2. The residential segment.
  3. Special pilot projects in high-voltage transmission and distribution lines.
  4. Renewable parks in some provinces.
  5. Additional policy schemes such as the special transmission and distribution pilot projects.

China’s Climate Commitment

President Xi Jinping announced 2030 carbon targets back in September 2020 at the Climate Ambition Summit. He updated the 2030 carbon targets by the end of 2020. These represent a part of China’s new Intended Nationally Determined Commitment (INDC).

China plans to have tight control over coal consumption growth while allowing the development of low-carbon-emissions energies such as renewables and nuclear to accelerate. Some main goals in its plans for the next five years include:

  • Reducing carbon emissions per unit of GDP by over 65% from the 2005 level.
  • Increasing non-fossil fuels in primary energy consumption to around 25%.
  • Increasing the forest stock volume by 6 billion cubic meters from the 2005 level.
  • Increasing wind and solar power generation capacity to at least 1,200 GW.

The article also noted that the Chinese government stated specific renewable installed capacity targets for the first time and that this was a part of its new national climate goals. It also noted that IHS Markit revised upwards its five-year solar PV installation outlook for China to reflect the nation’s commitment to continue supporting the development of renewables.

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