Your browser is not supported. Please update it.

19 April 2019

Chinese solar collapses under talks stress, under 40 GW for 2019

Early assessments of the 2019 solar markets may have missed a sizeable contribution from China, with many researchers believing that China’s position would become clear and it would lead to a few percentage points increase. In the last few days local consultancy Asia Europe Clean Energy Advisory Co (AECEA) has reported that in the first three months just 5.2 GW was installed and explained why this year less than 40 GW was likely –  perhaps less.

Slowly the Chinese position has been clarified by statements from China’s National Energy Administration (NEA) and it seems certain that solar will fall somewhat in China this year.

AECEA said this week saying that China’s Electricity Council reported last month that only 3.49 GW had been installed in January and February.

What China’s NEA has been trying to push is a new agenda and things are definitely changing. The NEA is targeting parity in 2021, so no subsidies for solar at all by then, and in the meantime it wants to honor historic Feed-In tariff (FIT) deals, but also offer the winners of those deals the opportunity of being at the front of the queue by converting them to parity deals. Then the NEA wants to look for more new grid-parity deals and finally later this year it will subsidize some projects, but allocate these last.

AECEA seems to be telling people who speak to them (we couldn’t) that subsidies in the order of $447 million are up for grabs for around 32 GW of solar energy, and that there are already 7.8 GW of deals already in the pipeline some of which may get cancelled, but most which go ahead. Of that $447 million, about 25% is allocated to residential solar projects.

The NEA has a deadline of May 31st for project bids and will slowly reveal who gets what. But the upshot of it all is that last year China did 45 GW of solar, and this year it may not even reach 40 GW, so a fall of at least 5 GW. And for the first quarter is is down at about half that run rate.

China will use the incentive of prioritizing unsubsidized projects, to the highest priority level – so the NEA will guarantee to use all of the electricity  from those sources says. It says is planning a nationwide centralized bidding process for projects seeking subsidies revealed in the next few months.