China’s National Energy Administration (NEA) may have lowered its 2014 installation target by 1 GW to 13 GW, but its recommended changes could prove a boon to distributed solar (DPV).
According to market research firm IHS Technology, the NEA has vowed to continue support for the PV industry and upcoming policy changes could help lift barriers for DPV and speed up development of new projects.
Indeed, IHS reports improving conditions for DPV and says nearly 5 GW of DPV systems could be completed in China this year.
NEA recommends the following changes to its DPV policies, which IHS says will become key drivers when ratified by the National Development and Reform Commission later this year:
- Expanding the definition of eligible DPV projects, possibility to include all systems up to 20 MW in size (not necessarily roof-mounted) that connect to a low-voltage grid.
- In addition to the likely change above, the grid voltage limit of eligible DPV systems may be increased from 10 kV to 35 kV. The change in definition of what the NEA considers a DPV project would open up incentives to a large number of ground-mount PV projects.
- DPV subsidies may more than double to be close to FiT rates, up from CNY 0.42 ($0.07) per watt to between CNY 0.90 and CNY 1 per watt, depending on areas of installation.
- The NEA is trying to establish a communication platform between government, banks and companies. It encourages the establishment of a one-stop financial solution for DPV companies, that would include support from a PV industry invesment fund.
IHS is sticking by its earlier prediction that ground-mounted PV systems will retain their major share of the Chinese market in 2014, but it now expects installations of DPV to accelerate rapidly. It forecasts new installation of 8 GW of ground-mount systems for the current year. The research firm also expects tougher examination procedures in China for ground-mounted PV systems, as quality issues have emerged in the northwestern PV systems since the beginning of the year.
Along with the shift from utility-scale solar to DPV, IHS reports a sharp increase in shipments of small string inverters in the first half of the year, marking a trend away from large central inverters.
In the first six months, Huawei’s string inverter shipments recorded more than 500 MW in China, marking an important milestone for the transition of inverters from central to string in commercial (small, medium and large) PV systems.
Despite this, IHS predicts that central inverter suppliers like Sungrow and TBEA will continue to dominate the overall market as ground-mounted systems continue to dominate the solar market.