Page 228 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
Solar Power In addition to the end of the EU restrictions,
China’s new rules to reduce government feed-
In January 2019, the National Development in tariffs for the photovoltaic industry have also
and Reform Commission (NDRC) and the National encouraged upstream firms to seek more overseas
Energy Administration (NEA) laid out plans to drive opportunities, while stabilizing the rapidly growing
the development of subsidy-free wind and solar and overheated sector Zheng, Glowing).
farms across China. As the cost of such installations
falls, bringing them closer to the price of coal Industry insiders believe China’s solar industry
power, which is set by the government, more will become subsidy-free as the country tries to
foreign players will be tempted to enter the sector. revitalizeitsphotovoltaicsectorafterthegovernment
While cautious, these investors see opportunities announced a plan to scale back its central subsidy
in China’s greater willingness to improve market system in 2018. China’s solar industry is expected
transparency and treat them as equals with to transition toward a subsidy-free market as
state-owned power companies (Zhang). China early as 2021, said a new analysis of China’s solar
saw its photovoltaic product exports reach a five- industry published by Asia Europe Clean Energy
year high in 2018, thanks to rising demand of (Solar) Advisory. The Chinese government outlined
production capacity abroad and the end of the a series of policies in 2019, looking to remove the
European Commission’s anti-dumping measures. hurdles that have been preventing the escalation
The total export of photovoltaic products reached of subsidy-free photovoltaic projects in the world’s
US$16.11 billion, the highest since the EU’s decision biggest solar power market. China’s National
to scrap minimum import price restrictions on Energy Administration announced plans in April
Chinese products. Total capacity of all the exported 2019 to drive the development of new subsidy-
components hit 41 GW, a year-on-year increase of free solar projects through policy support, hoping
30 percent, according to the China Photovoltaic new projects will be developed without the need
Industry Association. Currently, more than 20 for governmental subsidies, which it is believed
Chinese photovoltaic companies have production will steer the market in a new direction toward
interests overseas, through joint ventures, mergers zero-subsidy renewables. According to the NEA,
and acquisitions, mostly in Vietnam, Thailand and subsidy-free pilot projects commissioned by 2020
Malaysia. The upsurge of photovoltaic product can enjoy 20-year power purchase agreements
export volumes is in accordance with the country’s with fixed prices and top dispatch priority,
growing installed capacity for renewable energy, guaranteed by grid companies. With the subsidy-
which reached 728 GW, up 12 percent year-on- free pilots and the still pending subsidy program,
year by the end of 2018. The installed capacity China may have at least 40 GW of new photovoltaic
of photovoltaic power stations in 2018 reached installation per year during 2019 and 2020. With
174 GW, growing 34 percent year-on-year, while the production output figures of the world’s
power generated by photovoltaic cells reached biggest solar manufacturers booming on demand
177.5 billion kWh, growing 50 percent over 2017, outside China, together with the technological
according to the NEA. Solar power wasted in 2018 innovations that have also been speeding up the
reached 5.49 billion kWh, and the curtailment rate cost reduction of renewable energy, the China
was 3 percent, down by 2.8 percentage points. Photovoltaic Industry Association has an optimistic
The European Commission’s antidumping and outlook for 2020 (Zheng, Solar Industry).
anti-subsidy measures on solar panels from
China have been in place for since 2013. Chinese Thus, in the space of 25 years, China will
manufacturers were allowed to sell solar products have gone from having virtually no solar panels
in Europe free of duties only if they did so at or to leading the world by a margin of more than
above a progressively declining minimum price, 100 percent. Estimates from market analysts
or else they were subjected to duties of up to sees China photovoltaic panel installations hit a
64.9 percent. The expiration, which started on cumulative total of 370 GWdc (gigawatts in direct
September 3, 2018, was in the best interests of current) by 2024—more than double the US’s
the EU as a whole, considering the bloc’s aim capacity at that point. China’s huge and rapidly
of increasing its supply of renewable energy. developing population makes it the biggest energy
228
Solar Power In addition to the end of the EU restrictions,
China’s new rules to reduce government feed-
In January 2019, the National Development in tariffs for the photovoltaic industry have also
and Reform Commission (NDRC) and the National encouraged upstream firms to seek more overseas
Energy Administration (NEA) laid out plans to drive opportunities, while stabilizing the rapidly growing
the development of subsidy-free wind and solar and overheated sector Zheng, Glowing).
farms across China. As the cost of such installations
falls, bringing them closer to the price of coal Industry insiders believe China’s solar industry
power, which is set by the government, more will become subsidy-free as the country tries to
foreign players will be tempted to enter the sector. revitalizeitsphotovoltaicsectorafterthegovernment
While cautious, these investors see opportunities announced a plan to scale back its central subsidy
in China’s greater willingness to improve market system in 2018. China’s solar industry is expected
transparency and treat them as equals with to transition toward a subsidy-free market as
state-owned power companies (Zhang). China early as 2021, said a new analysis of China’s solar
saw its photovoltaic product exports reach a five- industry published by Asia Europe Clean Energy
year high in 2018, thanks to rising demand of (Solar) Advisory. The Chinese government outlined
production capacity abroad and the end of the a series of policies in 2019, looking to remove the
European Commission’s anti-dumping measures. hurdles that have been preventing the escalation
The total export of photovoltaic products reached of subsidy-free photovoltaic projects in the world’s
US$16.11 billion, the highest since the EU’s decision biggest solar power market. China’s National
to scrap minimum import price restrictions on Energy Administration announced plans in April
Chinese products. Total capacity of all the exported 2019 to drive the development of new subsidy-
components hit 41 GW, a year-on-year increase of free solar projects through policy support, hoping
30 percent, according to the China Photovoltaic new projects will be developed without the need
Industry Association. Currently, more than 20 for governmental subsidies, which it is believed
Chinese photovoltaic companies have production will steer the market in a new direction toward
interests overseas, through joint ventures, mergers zero-subsidy renewables. According to the NEA,
and acquisitions, mostly in Vietnam, Thailand and subsidy-free pilot projects commissioned by 2020
Malaysia. The upsurge of photovoltaic product can enjoy 20-year power purchase agreements
export volumes is in accordance with the country’s with fixed prices and top dispatch priority,
growing installed capacity for renewable energy, guaranteed by grid companies. With the subsidy-
which reached 728 GW, up 12 percent year-on- free pilots and the still pending subsidy program,
year by the end of 2018. The installed capacity China may have at least 40 GW of new photovoltaic
of photovoltaic power stations in 2018 reached installation per year during 2019 and 2020. With
174 GW, growing 34 percent year-on-year, while the production output figures of the world’s
power generated by photovoltaic cells reached biggest solar manufacturers booming on demand
177.5 billion kWh, growing 50 percent over 2017, outside China, together with the technological
according to the NEA. Solar power wasted in 2018 innovations that have also been speeding up the
reached 5.49 billion kWh, and the curtailment rate cost reduction of renewable energy, the China
was 3 percent, down by 2.8 percentage points. Photovoltaic Industry Association has an optimistic
The European Commission’s antidumping and outlook for 2020 (Zheng, Solar Industry).
anti-subsidy measures on solar panels from
China have been in place for since 2013. Chinese Thus, in the space of 25 years, China will
manufacturers were allowed to sell solar products have gone from having virtually no solar panels
in Europe free of duties only if they did so at or to leading the world by a margin of more than
above a progressively declining minimum price, 100 percent. Estimates from market analysts
or else they were subjected to duties of up to sees China photovoltaic panel installations hit a
64.9 percent. The expiration, which started on cumulative total of 370 GWdc (gigawatts in direct
September 3, 2018, was in the best interests of current) by 2024—more than double the US’s
the EU as a whole, considering the bloc’s aim capacity at that point. China’s huge and rapidly
of increasing its supply of renewable energy. developing population makes it the biggest energy
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