Whether subsidies phased out photovoltaic fever

Polaris solar PV net news: on April 26, Hou Shouli, head of the price Department of the NDRC’s price Division said publicly that China will improve solar power subsidies, subsidy falling steadily established mechanisms. Preliminary consider different PV electricity subsidies, along with technological progress gradually reduced photovoltaic subsidy levels until the removal of subsidies.

This is not the first time comment on the removal of the photovoltaic subsidy 2014 national energy work Conference has released information, explore forms the actual PV business models, gradually reducing power generation costs, striving to 2020 PV user-side parity.

Due to the photovoltaic power generation was more expensive than traditional sources of energy, therefore, in its initial stage of development of all countries in the world to give appropriate subsidies. China is no exception, for terrestrial photovoltaic power plants and distributed PV benchmark prices and direct subsidies respectively. In recent years, under the favorable policy incentives, photovoltaic industry is developing rapidly.

Around 2000, foreigners represented by Shi returned home, solar PV first crab people. Suntech, the 2005 listing on the NYSE, Shi price surge, become the richest man in China. Recently, European countries starting from 2010 has brought against China PV countervailing, anti-dumping trade cases, relying too much on external demand, the Chinese PV manufacturing end fully sunk to a low ebb, well-known PV Suntech and LDK suffered, and ultimately to a bankruptcy restructuring.

Now, or in the field of photovoltaic power stations also play again. Photovoltaic power plant for 25 years and more than 10% of the stable internal rate of return of capital chasing. Difference is that many State-owned enterprises also entered the photovoltaic field and accounts for more than half the country’s total installed capacity.

But rapid increases in the PV power station, abandoned light phenomenon, subsidy funding gap has become a prominent issue of enlargement, and has the potential to drive PV manufacturing end further expansion of production capacity, the industry has repeatedly issued the second PV foam or warning signals the coming of.

National Energy Board new energy and renewable energy Liang Zhipeng, Deputy Director, told reporters: “PV subsidies should be in accordance with the needs of the industry and investors to identify, much less, is not appropriate. ”

In future, subsidies phased out, was rationalized by fiery PV market development? Or do PV manufacturers can survive?

How big is the subsidy

There is no doubt that, for new industries, subsidies is essential, photovoltaic industry is a classic.

Although at the beginning of 2000, China PV industry relies on external markets have developed rapidly, but after 2010 with the European and American markets decline and gradually into the trough. August 2013 to promote the healthy development of photovoltaic industry, national development and Reform Commission published the play notification of price leverage to promote the healthy development of the photovoltaic industry, photovoltaic power plant, according to local solar resources and construction costs, the country is divided into three types of resources, set pricing standards, respectively. Of distributed PV projects, implemented in accordance with the electricity subsidy policies, subsidy of 0.42 Yuan per kilowatt hour.

State PV subsidy policy encourages the market was quickly activated, the 2014 national PV industry as a whole warmed up, the annual grid-connected PV cumulative installed capacity of 28.05 million-kilowatt, an increase of 60%. By the end of 2015, China PV cumulative installed capacity 43.18 million-kilowatt, become the largest country in the global PV installed capacity.

The latest news is that in 2015, PV total profits of listed companies shares, rising in the East to achieve net profit attributable to shareholders of listed companies of 320 million Yuan, an increase of 381.56%. No doubt, if you do not rely on the domestic market, such a performance cannot be achieved, and subsidies are the main causes of rapid development of the domestic market. It can be said that no subsidies, no great domestic PV market.

Cancel subsidies for PV companies you could be alive

If the Elimination of subsidies, PV manufacturers what would happen?

As technology continues to progress, in recent years, photovoltaic power plant equipment costs come down, now costs have fallen to about 0.6 Yuan per kilowatt hour, compared to China’s massive coal-fired power plants still lacked a competitive edge. Light resources of Gansu province as an example, coal-fired electricity price per kilowatt hour power benchmark 0.2978 Yuan, less than half the solar power generation cost. This means that unsubsidized PV power plant to lose more than 0.3 Yuan per kilowatt-hour, and capital certainly will be looking to the business.

Gansu province, after the subsidy if the benchmark 0.8 yuan per kWh of PV electricity price calculations, PV theory yields would be too high. But it’s not the truth, in PV equipment costs down at the same time, other costs are rising.

The reason, although in theory to the construction of photovoltaic power stations on the ground, the building area is huge, but due to land property, grid-connected conditions and other restrictions, to easy, suitable land was becoming scarce resources of building power stations. Enterprises which are making PV power station construction land while having to meet local requirements such as by providing support to local economic development, power plant investment and construction business into a holder of these resources in the eyes of the “flesh”. Enterprises meet these requirements requires a lot of input, improves the investment costs of PV in a disguised form, increased business reliance on subsidies.

Dissolve difficulties also contributed to the decline in subsidies to one of the most important factors. In the context of growth in electricity consumption of the whole society, West light resources places serious abandon, abandoned in some areas reached 50%, a substantial loss in revenue of enterprise investment.

In addition to the power station itself, the State encourages the development of PV power station, an important reason is to promote the healthy development of the whole industrial chain. In other words, subsidizing decides the life and death of PV, more decisions behind huge photovoltaic power plant equipment manufacture industry chain.

Can predict that hefty subsidies, PV power station equipment manufacturing industry chain on the vast majority of companies will face a crisis of survival. According to the phasing, PV enterprises sound development of cane or lose subsidies. PV Professional Committee of China renewable energy society, Deputy Director, Energy Research Institute, national development and Reform Commission Wang Sicheng, a researcher at the financial state of the weekly reporter said: “by 2025-2030, PV is expected to achieve parity in generation side, when the subsidies are expected to cancel. ”

Adjustment is imminent

If a PV subsidize short-term difficult to cancel, but the adjustment is imminent.

In March 2015, the CPC Central Committee and the State Council issued the opinions on further deepening system reform of electric power made, meet the market requirements of the electricity pricing mechanism, stimulates internal vitality of enterprises, the market plays a decisive role in the allocation of resources.

A year, national pilot projects to have as much integrated. But with photovoltaic generation benchmark price gap between coal benchmark price, as a form of solar power subsidies to cohesion mechanism and electricity market reform.

Hou Shouli said, the future will bring “direct development of resource district benchmark price” to “price formation rules”, that is, Internet benchmark price by local coal-fired units Internet benchmark price (including desulfurization, denitrification, dust) or market price plus fixed subsidies consists of two parts, changing existing price subsidies to fixed subsidies.

Formation rules must be adjusted in addition to subsidies, phasing has been put on the agenda. The strategic action plan for energy development (2014-2020) suggested that by 2020, about PV installed capacity reached 100 million-kilowatt, photovoltaic power generation and grid sales price.

How to make comprehensive cost reduction is the key to reducing subsidies. First application to further accelerate research and development of key technologies, raise the level of production, reduce the cost of PV power plant equipment. Meanwhile, optimizing the PV power plant investment environment, reduce the external costs. In addition to photovoltaic itself, the external environmental cost of coal and electricity and other power should be included in the price costs, raising the price of electricity, solar parity of process will be much quicker.

Industry insiders said, subsidies in the early development of PV industry is a must, the eventual elimination of subsidies is inevitable. Cuts in subsidies for PV industry is not bad, only after a thorough market competition to achieve the orderly and healthy development.

Original title: subsidies phased out photovoltaic can a fever?

Posted in Solar Charger.