Polaris solar PV net news: on September 29, the national development and Reform Commission issued the new benchmark concerning the adjustment of the new energy price notification (draft for soliciting opinions), intends to cut wind power, photovoltaic subsidy, and biomass power generation is no longer into the scope of subsidized renewable energy fund in favor of pricing and subsidies paid by the provinces. , The biggest change is the PV electricity prices, power station benchmark price fell between 23.5-31.2%, distributed electricity subsidies decline between 28.6-52.4. In addition, 2018 onshore wind down 0.03 Yuan per kWh electricity price than originally planned, offshore wind electricity prices will be down 0.05 Yuan per kWh, that offshore projects electricity prices cut by 5.9%, intertidal project 6.7%. The execution time of the new deal on January 1, 2017.
Offshore wind energy: according to our calculations, this price effect on the offshore wind project ROI is small. Intertidal zone of offshore projects and project return on investment (without lever) decreased by around 90-110 BP and 110-140 BP. Under the new pricing, offshore project return on investment (without lever) for 6.2-7.8%, and intertidal project return on investment (without lever) is 7.5%-9.6%. Though down marginally, due to offshore wind energy project construction period is long, high risk and current offshore wind electricity prices are lower than expected, in a short period of time continue to drop offshore wind electricity prices will further affect the enthusiasm of developers. We expect in the new tariff policy in the final project status conditions may meet the old electricity prices be adjusted-from “the projects put into operation” changed to “projects”, to allow sufficient time for developers to develop the project.
PV: subsidies for renewable energy development fund large gap is the primary reason for the downgrade, so cut is much greater than the costs decrease. On average, the component prices dropped close to 30% in the year 2016, the EPC costs in any. However, land, and labor costs are on the rise.
If the draft price, return on investment (without lever) decline has fallen and pressure found in some provinces in the South. Is in need of attention, three types of resources in a variety of complementary projects, more and more, and in some provinces has become mainstream, the cost is usually higher for this part of the project, under the new tariff rate of return might be too low. But at the same time, many of these projects are dominated by construction of photovoltaic projects, ignoring the development of complementary industries such as agriculture and fishing. Low prices also may encourage developers to actually focus on complementary industries, expanding revenue sources.
Ground power station, due to the tender in the province have allocated, and many provinces already requires the project prior to June 30, 2017 and even earlier network, we believe that 2017 new installed capacity will be ordered in the first half.
For roof project,, this year June issued of on perfect PV power scale management and implementation competition way Configuration project of guide views in the has clear provides roof project “not by annual scale limit, regions can at any time accepted project record, project production Hou that into national can renewable energy power subsidies range”, so, roof project developers should in this year end of zhiqian towards roof resources, and timely record. But draft also proposed a full Internet distributed subsidies granted the approval process in accordance with the implementation of photovoltaic power stations, means that such projects will also face the dilemma of subsidy arrears. Taking into account the cost of capital and cash flow pressures, there could be more spontaneous use of developers favor the project.
We expect that the final price is likely to float, and do not rule out the quota system will be born with green cards and other subsidies.
Original title: remarks on new new benchmark in energy prices