Hong Kong investment company Kong Sun Holdings Limited has announced this week a partnership that will swell Chinas growing distributed generation (DG) solar capacity by 600 MW over the next three years.
Kong Sun will partner with Chinese EPC firm Wuxi Liansheng to develop DG systems across China in a collaborative project due to commence in 2015.
The framework agreement announced by Kong Sun gives the company priority rights to invest in any DG project developed by Wuxi Liansheng that has a capacity greater than 5 MW. The investment company added that the expected internal rate of return (IRR) is higher than 12% per project.
Kong Sun’s movement into Chinas growing DG sector could be a sign that the larger investment firms are beginning to support this growing segment of the market. Having previously operated solely within the ground-mount, utility-scale PV sector, this cooperation with Wuxi Liansheng, plus an earlier agreement announced late last month with Yucheng Hangyu, signifies a "furtherance of the Group’s entrance into the DG PV power system market", read a company statement.
Kong Sun, formerly a large player in China’s real estate market, switched its attentions to solar PV in the Fall of this year, quickly stockpiling a solar portfolio of 70 MW.
The company’s pledge to help develop China’s DG industry will be welcomed within the Peoples Republic. Bold plans announced earlier this year to source 8 GW of a targeted annual growth capacity of 14 GW from DG have thus far fallen short.
In May, data from China’s National Energy Agency (NEA) revealed that just 188 MW of DG capacity had been installed, and despite hopes being pinned on an end-of-year glut boosting numbers, solar analysts have warned that further contractions are likely at the end of the year a situation that could allow Japan to end 2014 as the worlds largest market in terms of new PV capacity added.