The National Energy Administration recently announced the “Implementation Plan for Photovoltaic Power Generation Construction in 2016”. The notification indicates that the new scale indicator for photovoltaic power plants in 2016 is set at 18.1GW, with general photovoltaic power plant projects accounting for 12.6GW and photovoltaic technology base scale at 5.5GW.
It is noteworthy that since the indicators for photovoltaic poverty alleviation were not explicitly published in this plan, industry insiders believe that 18.1GW does not represent the total indicators for photovoltaic plants this year. Based on the photovoltaic poverty alleviation amounts from previous years, the total indicators for photovoltaic plants this year may exceed 20GW. If calculated based on an investment of 10 yuan per watt, the total investment in photovoltaic plants this year may exceed 200 billion yuan.
In addition to the new photovoltaic power plant indicator of 18.1GW, the contents of the notification can be summarized into the following points:
1. The planned scale accounts for a significant portion of the overall indicators
Among this year’s target of 18.1GW, the component base required is 5.5GW, which accounts for about 30% of the total target. The notification stipulates that the planned single power plant scale must be over 100MW, and a competitive bidding or selection process must be adopted, with electricity prices being a key competitive criterion.
Last year’s plan required that monocrystalline component conversion efficiency exceed 17%, multicrystalline components exceed 16.5%, and component wattage be no less than 270W. Based on last year’s winning bid results, leading manufacturers with technical and scale advantages (such as JA Solar, Trina Solar, and JinkoSolar) are likely to have a competitive edge; these manufacturers will have stable export opportunities due to demand from the plans even during off-seasons.
2. Some western provinces will not have indicators issued this year, but the issue of waste power generation will be difficult to resolve in the short term
Gansu, Xinjiang, and Yunnan provinces have halted the issuance of indicators citing “lack of conditions for photovoltaic power plants,” resulting in a total of zero indicators this year; Ningxia, Qinghai, and Inner Mongolia have new indicators still being issued. However, as the construction of western electricity delivery cables cannot be completed in the short term, the power limit situation in western provinces will continue to worsen, potentially facing situations of stopping or delaying the issuance of installation indicators as well.
Additionally, of the 2.1GW indicator in Inner Mongolia, 1.5GW are planned indicators; among them, 1GW is part of the second phase of the leader plan photovoltaic demonstration base project located in the Baotou coal mining subsidence area.
3. The subsidy distribution process will be streamlined
The “2016 Implementation Plan” clearly states that provinces must organize relevant project units to report information through the “National Renewable Energy Generation Project Information Management Platform.” Therefore, the future project operation process will be as follows.
Successful registration in the information management platform will be equivalent to entering the subsidy directory and obtaining qualification for subsidies, hence the subsidy directory will become historical. This measure will significantly reduce the time required for subsidy distribution processes and accelerate the speed of subsidy distribution.
4. Strengthening the management of local indicators and photovoltaic project power generation
The notification clearly instructs that the progress of local plans and the power generation situation of photovoltaic power plants must be closely tracked through the information management platform and ensures the implementation of policies regarding grid connection, guaranteed purchasing, electricity settlement, and renewable energy subsidy distribution.
Industry researchers have summarized that despite ongoing issues such as delays in power plant subsidies and serious power limits in the west, which result in investment returns in Chinese power plants falling far short of manufacturers’ expectations, the national emphasis on the photovoltaic industry is apparent with frequent recent policies being issued, including quota indicators, guaranteed power generation hours, and support for energy storage development, which benefits the stable development of the industry. With the release of the 2016 photovoltaic power generation construction plan, a new rush for installations is expected. It is predicted that the benchmark price for photovoltaic power will significantly decrease in 2017, and the later the installation, the lower the price will be. Therefore, a rush for installations is expected to occur before the end of the year.
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