PV on-grid tariff subsidies receive policy support

The Chinese PV industry, which has been depressed for two years, has finally begun to smell the breath of spring. On August 30, the Development and Reform Commission made it clear that the distributed PV feed-in tariff standard was 0.42 yuan per kilowatt-hour. Compared with the RMB 0.35 per kilowatt-hour subsidy standard in the public opinion draft, the subsidy standard has increased by 20%, adding momentum to the “cold winter” of the photovoltaic industry.

Distributed generation subsidies: 0.42 yuan per kilowatt-hour. Subsidy policies have been one of the most concerned policies for photovoltaic companies. The photovoltaic industry is expected to use this opportunity to achieve profitability as soon as possible.

The Development and Reform Commission notice clearly stated that the implementation of the sub-regional benchmark on-grid tariff policy for photovoltaic power plants. According to local conditions of solar energy resources and construction costs, centralized photovoltaic power stations will be divided into three types of resource areas throughout the country, with power price standards of 0.9 yuan, 0.95 yuan, and 1 yuan per kilowatt-hour. For distributed photovoltaic power generation projects, a policy of subsidizing electricity prices based on electricity generation is implemented, and electricity price subsidy is 0.42 yuan per kilowatt-hour.

The Development and Reform Commission stated that the improvement of the photovoltaic power generation price policy is an important measure to implement the requirements of the State Council and promote the healthy development of the photovoltaic industry, which is conducive to exerting price leverage, guiding the optimal allocation of resources, and promoting the rational distribution of photovoltaic power generation projects. Incentives photovoltaic companies to improve their technology and continuously reduce costs.

Compared with the subsidy standard of 0.35 yuan per kilowatt-hour in the consultation draft issued in March this year, Lin Boqiang, director of the China Energy Economic Research Center of Xiamen University, believes that the subsidy standard of 0.42 yuan per kilowatt-hour has increased by 20%, exceeding market expectations. .

"The national photovoltaic power price is about 1 yuan per degree, and the price of thermal power is 0.4 to 0.5 yuan. After subsidies, the market competitiveness of photovoltaic power generation will be greatly enhanced," Lin Boqiang explained.

There are three types of subsidy for centralized PV power stations. It is worth noting that the subsidy prices for these power stations are divided into three types of regions, and their respective prices are different.

It is understood that before the state subsidies for photovoltaic power stations were constructive subsidies, that is, investors could apply for subsidies at the time of construction. The subsidy policy introduced by the Development and Reform Commission is to encourage more actual power generation, so subsidies are made according to actual power generation. In addition, the subsidy for the power station has been changed from the unified national price to different prices in the three types of regions, making the subsidy more reasonable.

"Zone pricing is very worthy of recognition. The resource conditions in different regions have a great impact on power generation, and pricing should be differentiated," said Yu Wenjun, an industry analyst at Shenyin Wanguo.

Jin Jing, the global brand director of the company, said that the lowest price of regional benchmark price of 0.9 yuan per kilowatt-hour is also 12% higher than the 0.75 yuan per kilowatt-hour in the consultation. Will benefit photovoltaic manufacturers and downstream investors. The increase in downstream demand for equipment will benefit upstream photovoltaic equipment manufacturers.

Not only that, the notice also pointed out that the zone benchmarking electricity price policy is applicable to the photovoltaic power station project that was approved after September 1st and approved before September 1st, but will be put into operation on or after January 1st, 2014; the tariff subsidy standard is applicable. In addition to enjoying the central government investment subsidies in addition to distributed photovoltaic power generation projects. The implementation deadline for benchmarking on-grid tariffs and tariff subsidies is, in principle, 20 years.

The industry believes that the 20-year subsidy period is also higher than market expectations. The industry once considered that the duration of subsidies may be set at 10 years, which will help open up the domestic market for photovoltaic applications.

After speeding up the construction of the power station and experiencing a two-year loss in the winter, the Chinese PV industry has finally begun to smell the breath of spring. According to the plan, in 2015 China's total installed capacity reached 35GW or more.

However, under the stimulation of favorable policies, in the first half of this year, the commercial ecology of domestic photovoltaic installations is improving, and the prices of components are also in a stable range, even rising slightly.

Industry insiders predict that the acceleration of profit will accelerate the construction of the power station, and there will be an upsurge of power plant rushing. It is estimated that China's PV installation capacity in 2013 will reach 8.5 GW, which is an 88% increase from 4.5 GW in 2012. In 2014, China's PV installation capacity may reach more than 10 GW.

Today, grid connection difficulties and electricity price subsidies have received support from the policy level, confidence in the development of the industry has been boosted, and the tide of investment has expanded.

It has been revealed that in the near future, it will also clarify the 50 percent preferential policy for value-added tax for photovoltaic power plant projects. PV plant operating companies have a VAT of 17%. If the value added tax is lowered by 8.5 percentage points, the return rate of the power station will increase by 1%-2%, which will directly benefit the photovoltaic power plant operating companies.

However, Meng Xianyi, deputy director of the China Renewable Energy Society, believes that the pricing mechanism, the benchmark price of electricity in the classified regions, the distributed photovoltaic power price, and the additional increase in renewable energy are all related to each other. Whether it can achieve the healthy development of the industry, the rationalization of the management system is the key, which depends on the cooperation of the power grid: whether the additional price can be received in full, and whether the power grid can be issued to the photovoltaic power generation companies in time.