China reveals details of distributed generation policy

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Better late than never, China has fired the starting gun on its ambitious ditributed generation (DG) solar policy.

In a policy note issued to investors by Deutsche Bank yesterday (Thursday) the bank revealed details of a policy document published by China’s National Energy Administration (NEA).

According to the note, the national policy will drive rooftop installations –with all systems below 20 MW in size eventually being classed as DG – with local authorities incentivized to install such systems across China in affordable housing, railway stations, motorway services, airports and other transport hubs as well as in sports venues, parking lots and agricultural land.

The policy also calls for a streamlining of interconnection for faster grid connection of DG systems and stipulates energy utilities must plan to incorporate DG in their operations and ensure prompt payment, possibly monthly, for distributed generators.

With the NEA announcing its intent to develop innovative financing methods for DG, Deutsche Bank noted the potential for solar leasing companies, based on the model used by U.S. firm SolarCity, to flourish under the new policy.

The news comes hot on the heels of the announcement, last weekend, that China is set to introduce a nationwide carbon cap-and-trade system two years earlier than planned, in 2016.