At a recent State Council executive meeting, six key measures were proposed to directly tackle the long-standing challenges facing the domestic photovoltaic (PV) industry, including power purchase issues, subsidy delays, and financing difficulties. The announcement quickly sparked widespread discussion among industry experts, who believe these measures aim to address the "bumps" in the large-scale expansion of China's PV market. Many expect more favorable policies to follow soon.
Industry analysts highlighted that the main concern driving investment enthusiasm in the PV sector is the issue of full grid connection and delayed subsidies. While grid companies have gradually eased restrictions since last year, the most anticipated policy—power generation subsidies—is expected to be finalized by the end of this month. This development is likely to trigger a surge in PV installations in the second half of the year, providing a much-needed boost to the entire supply chain.
**Subsidies Become a Lifeline for the PV Industry**
For years, the domestic PV market has drawn significant attention both domestically and internationally, with the introduction of electricity price subsidy policies becoming a critical factor in its growth. Recently, as the EU’s preliminary ruling on anti-dumping and anti-subsidy measures against China intensified, calls for a rapid domestic market launch have become even stronger, accelerating the release of the subsidy policy.
During the SNEC 2013 Shanghai Photovoltaic Exhibition, Wang Zhongying, deputy director of the Energy Research Institute under the National Development and Reform Commission, stated that all parties had reached a consensus on the tariff subsidy policy, especially for distributed PV systems. This view was later confirmed by an industry expert at the 7th New Energy International Summit in Beijing, who told the China Securities Journal that the final plan would be officially released by June 30.
In mid-March, the National Development and Reform Commission issued a draft notice titled "Improving the Power Generation Price Policy," which categorized large-scale ground-mounted PV projects into four types based on solar irradiance levels, setting benchmark on-grid prices between 0.75 to 1 yuan per kWh. For distributed systems, the self-consumption subsidy was set at 0.35 yuan per kWh. Previously, the industry had expected a unified benchmark price of 1–1.15 yuan per kW for ground-mounted systems and a 0.4–0.6 yuan per kWh subsidy for distributed projects. However, after receiving numerous comments from authoritative organizations, the final version is now being consolidated.
Wang Zhongying emphasized that after nearly a year of negotiations, the electricity price subsidy policy has finally reached a unified conclusion. According to the final agreement, large-scale ground-mounted PV projects will have four pricing tiers: 0.8, 0.9, 1.0, and 1.1 yuan per kWh, depending on resource availability. For distributed PV projects, three subsidy levels are set: 0.2 yuan per kWh for industrial and commercial users, 0.4 yuan per kWh for large industrial users, and 0.6 yuan per kWh for residential, hospital, school, and rural users. Additionally, for projects that generate excess electricity, the grid company will purchase it at the local thermal power benchmark price, with an extra 0.35 yuan per kWh financial subsidy.
**A 4 Trillion-Yuan Rooftop Market Awaits**
Despite variations in subsidy amounts compared to initial expectations, industry players agree that the policy’s implementation will significantly drive domestic PV installations. According to forecasts from several market institutions, the total installed capacity of distributed PV in 2013 is expected to reach 6 GW, accounting for 60% of the annual target of 10 GW.
Notably, rooftop PV systems have already demonstrated their potential across the country, becoming a major focus for investors shifting from the west to the central and eastern regions. A senior executive from a leading PV project developer noted that many companies have redirected efforts from large-scale western projects to rooftop installations, particularly in residential areas. “This shift took some time. Previously, everyone rushed to build large-scale projects in the northwest due to clear grid tariffs. Now, with the State Grid allowing up to 6 MW of PV systems to connect freely, interest has shifted. Our sales team is now frequently handling residential PV orders, and while the return on investment remains uncertain, we are optimistic about the future.â€
According to Hu Runqing, a researcher at the National Development and Reform Commission’s Energy Research Institute, there is nearly 400 million kilowatts of potential rooftop PV installation space in China. Analysts estimate that if the current average cost of rooftop PV systems is around 10,000 yuan per kW, the market could be worth up to 4 trillion yuan.
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