Subsidies for Chinese domestic PV power generation

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China International Trade Representative
by Felice Lucia

Currently, the Chinese domestic photovoltaic power generation projects that have connected to the grid contain four categories: the Golden Sun Pilot Project, the Building Integrated Photovoltaic (BIPV) Project, the Grid-Connected Photovoltaic Power Station Project, and the Distributed Photovoltaic Power Generation Project. The electricity price and subsidies in the aforementioned four photovoltaic power generation projects are treated differently depending on their categories, which means that different policies shall be applied to them.

Distributed Photovoltaic Power Generation Project.

China currently subsidizes the distributed photovoltaic power generation projects as whole power quantity, and the subsidy standard is 0.42 RMB per kilowatt-hour (tax included). The central finance department subsidizes such projects through the Renewable Energy Development Fund, and subsidies from the fund are transferred from the grid companies to the photovoltaic power generation projects. Among the said subsidies, the grid companies will purchase the part of electricity that exceeds the amount that used by the Distributed Photovoltaic Power Generation Projects at the benchmarking grid purchase price of coal-fired units. Besides, for the electricity that used by the said projects themselves, fees for system spare capacity as well as other service charges are waived from the price charged. In principal, the period of aforementioned subsidy is 20 years.

The Building Integrated Photovoltaic (BIPV) Project.

Since 2006, the central government has granted free subsidies consisting in special funds to approved renewable energy architecture pilot projects. The government has arranged special funds to grant subsidies to the qualified Building Integrated Photovoltaic (BIPV) Project in order to partially support the initial investment in optoelectronic applications. The subsidy criteria are decided by the Ministry of Finance and the Ministry of Housing and Urban-Rural Development according to different elements including the cost of optoelectronic applications, scale effect, the sustainability of enterprises, etc. The subsidy standards are adjusted annually according to the development of new technologies and cost reduction. The government also annually organizes the subsidy work to be granted to BIPV. For instance, the general criteria for 2009 were 20 RMB/Wp, and the specific standards were set categorically according to the integration and architecture, the development of new photoelectric technologies, etc

In 2012, the central government fiscal subsidy criteria were: in building materials and such types of BIPV projects which integrated to the construction closely the standard was tentatively fixed at 9 RMB per kilowatt-hour, while as to the type which integrated to the construction, normally the standard was tentatively fixed at 7.5 RMB per kilowatt-hour. The final subsidy standard were checked and ratified according to the market price change of photovoltaic products.There are no yet central government fiscal subsidy criteria for the BIPV Project of the year 2013.

The Golden Sun Pilot Project

The "Golden Sun" demonstration project (金太阳示范工程) is the second national solar subsidy programme. The program was established in July 2009 and announced by the Ministry of Finance, Ministry of Science and Technology and the National EnergyAdministration of the National Development and Reform Commission (NDRC). The Golden Sun Programme provides upfront subsidies for qualified demonstrative PV projects from year 2009-2011. The first solar subsidy program, the BIPV subsidy program announced in March 2009, provides upfront subsidy for grid-connected rooftop and BIPV systems. The aim of both programmes are to promote renewable energy generation and create a domestic market for its solar cell and panel manufacturers.

According to the Golden Sun programme , some specifics are:

• The projects would need to benefit both residents and businesses that are on and off the grid.

• Prices to be paid for crystalline silicon panels should be no higher than (in 2009) RMB 14 ($2) per watt. The ceiling for amorphous silicon panels is RMB 9 ($1.32) per watt.

• The government will subsidize 50 percent of investment for solar power projects as well as relevant power transmission and distribution systems that connect to grid networks.

• For independent photovoltaic power generating systems in remote regions that have no power supply, the subsidy will rise to 70 percent, the ministry said in an announcement on its web site.

• Grid companies are required to buy all surplus electricity output from solar power projects that generate primarily for the developers own needs, at similar rates to benchmark on-grid tariffs set for coal-fired power generators.

• To qualify for the subsidy, in addition to other requirements, each project must have a generating capacity of at least 300 kilowatt peak, while construction will have to be completed in one year and operations will have to last for at least 20 years.

• The government plans to install more than 500 megawatts of solar power pilot projects in two to three years.

In 2012, the central government fiscal subsidy criteria for the grid-connected photovoltaic power generation projects were: (1) in principal, the subsidy standard of electricity generated by user side-on-grid photovoltaic power generation projects was 7 RMB per kilowatt-hour; and (2) the subsidy standard on independent photovoltaic project and wind solar hybrid power generation projects was decided separately. Due to the concerns about energy storage device equipment and other relevant elements, the subsidy standard based on 7 RMB per kilowatt-hour increased an appropriate proportion for the electricity generated by centralizing distributed user side-on-grid photovoltaic power generation projects which combined the smart grid with the micro grid technology.There are no yet central government fiscal subsidy criteria for the Golden Sun Pilot Project of the year 2013.

source:  "Electricity price and subsidies in photovoltaic projects in China", written by Wang Weidong and Zhou Jiangang- Grandall Law Firm and published on http://www.lexology.com

Comments

Such subsidies for Chinese

Such subsidies for Chinese domestic PV power generation by the government will encourage private companies to come forward in the power generation home care projects and invest money. Thanks for sharing more info about the Golden Sun project.

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