China’s Solar Industry Expected To Be Subsidy-Free In 2021

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Clean Power


Published on April 15th, 2019 |
by Joshua S Hill





April 15th, 2019 by Joshua S Hill 


China’s solar industry is expected to transition towards a subsidy-free market which could begin as early as 2021, according to a new analysis of China’s solar industry published by Asia Europe Clean Energy (Solar) Advisory.

The Asia Europe Clean Energy (Solar) Advisory (AECEA) published its new analysis last week, analyzing a new consultation paper published by China’s National Energy Administration (NEA) entitled Work Plan for the Construction of Unsubsidized (Grid-Parity) Projects for Wind & Solar PV. It follows in the footsteps of China’s efforts to revitalize its solar industry after it took a significant hit in May of 2018 when the NEA essentially capped installations.

Already this year, China’s NEA has announced plans to drive the development of new subsidy-free solar (and wind) projects through political support and requirements and hinted that it intends to re-open its solar subsidy project with a 2019 cap of 3 GW.

“This signals a permanent policy shift towards zero-subsidy renewables,” explained Jonathan Luan, an analyst with Bloomberg New Energy Finance who spoke to me via email in January regarding the NEA’s plans to push the development of subsidy-free renewable energy projects. “Though the industry suspected it coming after the May 2018 announcement applying breaks to the subsidy flow, the new policy clearly steered the market to a new direction. The two-year policy window should stimulate new build. We are more inclined towards the optimistic scenario of our 34-44GW solar forecast for 2019.”

The focus on subsidy-free projects has been given further clarity after the NEA published last week its consultation paper which, according to the AECEA, gives confirmation priority to the construction of unsubsidized solar projects ahead of any projects that require or apply for subsidies. The NEA is hoping new projects will be developed without the need for subsidies from China’s Central Government, or that already-proposed projects may be converted so as to not require subsidies.

To further push the country’s solar industry towards subsidy-free solar projects, the NEA also announced that it would cancel approval for any solar project which has been approved for two years but which has not started construction or has not applied for an extension, and any projects which have applied for an extension but have not begun construction within the extension period, regardless of intentions to complete said project. Any of these cancelled projects which do wish to continue will have to re-participate in the 2019 bidding process as a new construction project.

Solar projects which require state subsidies have also all been put on hold and all provinces and regions have been prohibited from conducting any competitive bidding rounds for solar projects which require state subsidies until the NEA has confirmed the first round of subsidy-free projects.

The highlight from AECEA’s analysis of the NEA’s new consultation paper was the “greater clarity” provided for what the AECEA is describing as a “transitional” period between the Chinese solar PV market relying on subsidies, to a market utilizing both grid-parity and subsidized projects, to what is expected to be a subsidy-free market beginning 2021. The end to Feed-in Tariffs for both solar and wind has already been signaled by the NEA in its 3-year Clean Energy Consumption Action Plan 2018-2020 released on November 30, 2018, which effectively provides political certainty for the completion of China’s 13th Five-Year Plan.

As to what this means for China’s solar industry, anyone’s guess is as good as ours. Further clarity over the coming months is promised (as highlighted above) by the NEA which will allow for a better understanding of what 2019 will look like for China’s solar industry — and, therefore, the global solar industry — and will also begin to provide some clarity for 2020 and the future of a subsidy-free Chinese solar industry.

 
 



 



Tags: AECEA, Asia Europe Clean Energy (Solar) Advisory, China, China solar, China solar PV, China’s National Energy Administration, National Energy Administration, NEA





About the Author

Joshua S Hill I’m a Christian, a nerd, a geek, and I believe that we’re pretty quickly directing planet-Earth into hell in a handbasket!

I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.












China’s Solar Industry Expected To Be Subsidy-Free In 2021