China PV Power Grid Feed-In Tariff Policy Officially Issued

Author:  Source: the Internet  Published time: May 16, 2013 

The Seventh 2013 International Solar Energy Industry & PV Project (Shanghai) Exhibition & Forum took place as scheduled in Shanghai, where Research Report on China PV Power Grid Feed-in Tariff (by Category) Policy was officially released. The report was completed under the sponsorship of the CREIA (Chinese Renewable Industries Association). 

The Report divides China (exclusive of Hong Kong, Macau, and Taiwan) into four resource areas according to the different amounts of total annual horizontal radiation of solar energy; it sets different benchmark PV power grid feed-in tariffs for different areas in accordance with investment costs and the payback period; it proposes different distributed power tariffs by taking into account both encouragement of development and fairness in ROI (return on investment). 

As PV power generation is not competitive in the market in terms of costs, fixing its grid feed-in tariff is a good incentive, which can be seen in the result from the implementation of the fixed power tariff policy issued by the National Development and Reform Commission in July 2011. However, since this policy applies to the whole country except Tibet, it has different incentive effects on regions with different resource endowments. 

According to our source, the installed PV capacity will be adjusted from 21gW to 35gW in the 12th Five-Year PV Plan” – an adjustment meaning that the PV industry needs to maintain a pace of installing 10gW per year in the coming years and this is a mission impossible with the current support policies. If international experience is any reference, reasonable power tariff policy guidance will boost the development of the PV industry very efficiently; a reasonable and effective power tariff not only promotes the development of the industry but also effectively cuts government subsidies so that government can maximize the effect of its subsidies for renewable energy. It is therefore necessary to design a differential power tariff based on different resource endowments and development models.  

As set in the Report, the annual GEAHs (Generating Equipment Availability Hours) are larger than 1,600 hours in a Category-1 resource area; 1,400 to 1,600 GEAHs in a Category-2 resource area; 1,200 to 1,400 GEAHs in a Category-3 area; fewer than 1,200 GEAHs in a Category-4 area. The benchmark PV power grid feed-in tariff calculated based on resource status and power generation costs and suitable to various areas: RMB0.8/kWh for a Category-1 area; RMB0.9/kWh for a Cateogry-2 resource area; RMB1.0/kWh for a Category-3 area; RMB1.1/kWh for a Category-4 area. The tariff can be appropriately increased to RMB1.15/kWh in areas of harsh natural conditions such as Tibet and Aba Autonomous Prefecture, Sichuan.