Distributed photovoltaic power generation has become a key area of interest in China's renewable energy sector. While photovoltaic leasing models offer potential for residential and commercial use, their widespread adoption remains challenging in the near term. One of the main reasons is that China’s current solar subsidy framework is primarily based on Feed-in Tariffs (FIT) and upcoming distributed power subsidies. Unlike the U.S., where policies like Investment Tax Credits (ITC) and accelerated depreciation support leasing arrangements, China lacks similar incentives, making it less attractive for investors.
Moreover, the existing electricity pricing system, which is closely tied to both sales prices and local sunshine conditions, doesn’t fully support the financial viability of leasing models. According to industry analyses, the economic feasibility of PV leasing in China is highly dependent on government subsidies. However, issues such as uncertain subsidy amounts, unpredictable timelines, and delayed payments have significantly hindered the growth of this model.
Looking ahead, distributed photovoltaic projects are expected to be the main driver of market development. However, market-oriented initiatives face several obstacles. These include unclear long-term return expectations, complex approval procedures, and challenges with grid integration. Residential rooftop installations are particularly important for marketization, but the lower electricity rates for households compared to industrial or commercial users make it difficult to ensure sufficient self-consumption, especially during weekdays. To address this, energy storage systems would be needed, yet government support for such technologies remains limited.
As a result, the success of future market-oriented projects will largely depend on policy improvements, particularly in adjusting the grid-connected electricity price mechanism. The introduction of supportive policies for distributed systems is likely to create new investment opportunities in the sector. Current challenges include unclear project approval processes, the transition from an approval-based to a filing-based system, and the sustainability of renewable energy tariff funding.
Key upcoming policies, such as the "Implementation Measures for Distributed Photovoltaic Power Demonstration Zones and Standards for Electricity Price Subsidy," are expected to provide clarity and boost investor confidence. If these policies exceed expectations or if additional undisclosed measures are introduced, they could lead to significant transactional opportunities in the solar industry. In the short term, the release of these guidelines will be crucial in shaping the future of distributed photovoltaics in China.Kinze Planter Parts/Kinze Spare Parts:
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