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China announces clear policy on solar pricing

Date
02 August 2011
China announces clear policy on solar pricing

BEIJING: The National Development and Reform Commission in China (NDRC) has announced a pricing policy on solar photovoltaic (PV) power generation electricity to the grid, which is a major step forward in accelerating development in China's domestic solar market and will help drive the Clean Revolution.

NDRC are improving the pricing policy for solar PV power generation to regulate pricing management and promote the sustainable development of the sector and industry.

The new feed-in tariffs cover both open and non-competitive PV project tenders, and the uniform grid pricing for solar PV power generation will be used in accordance with the average investment and operation costs, in reference to the concessionary bidding prices of solar PV power station and China’s solar energy resource situation.

The NDRC's pricing policy is gladly clearly defined, and in more detail specifies: 

  • The new solar PV pricing will be utilized for any projects approved before July 1, 2011 and put into operation by December 31, 2011. But without NDRC’s review and approval for pricing, the to-grid price is set at 1.15 RMB/KW (including tax, same applicable to the below). For any projects approved on July 1, 2011 and afterwards, and those approved before July 1, 2011 but not completed before December 31, 2011, (except those in Tibet) the 1.15RMB/KW will still apply. All other projects in other provinces and regions shall apply 1 RMB/KW. NDRC will adjust the price level based on future investment cost changes and technological advancement
  • For projects approved through concessionary bidding, the price that was set in the bidding documents shall apply, and the price will not be lower than that set in the bidding documents
  • For projects granted by Central Committee’s fiscal subsidies, the price applied shall be the same as that for local coal-fired power plants with desulfurization installations
  • For the part of the price that's higher than that set for local coal-fired  power units with desulferization installations, practice shall refer to the Renewable Energy Power Generation Pricing and Fees Sharing Management Trial Method, and the difference shall be covered through renewable energy electricity price amendments, collected nationwide.  

Changhua Wu, Greater China Director, The Climate Group, says: "China has been leading the world in solar PV manufacturing in the last decade. High cost and inadequacies in grid connection have been major barriers for domestic solar PV installations. The step taken by NDRC today to regulate the pricing of solar power generation is a significant milestone for both China and the world to motivate faster development of domestic solar power industry and market. The clarity of policy direction and incentives for companies to join the league will play an important role to scale-up Chinese solar power generation, which in turn will contribute to tackling of climate challenges globally. This announcement is part of the Clean Revolution." 

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