Three major obstacles to curbing the development of China's PV domestic market

Abstract PV has fallen into a trough in external troubles and suffered industry-wide losses. In the face of double-counter sanctions in Europe and the United States, whether it is government officials or business leaders in the photovoltaic industry, as well as experts and scholars in the economic circles, everyone agrees on a problem: to immediately start domestic PV...
PV fell into a trough in external worries and suffered industry-wide losses. In the face of double-anti-sanctions in Europe and the United States, whether it is government officials or business leaders in the photovoltaic industry, as well as experts and scholars in the economic field, everyone agrees on a problem: to immediately start the domestic PV market.

The importance of opening up the domestic market

In recent years, China's photovoltaic industry has risen rapidly. Through the development of scale, technology and industrial chain, the cost of photovoltaic energy has been greatly reduced. Sadly, domestic users have not enjoyed the benefits of the growth of the photovoltaic industry, and 80% of their PV products are exported overseas. In 2011, the global installed capacity of new photovoltaics was 28GW, and the global component capacity was 63GW. China's component capacity is 40GW, the output is 23GW, and the domestic installed capacity is only 2.5GW. China controls 65% of the world's photovoltaic capacity, accounting for about 60% of the market share, but our new installed capacity of photovoltaics in 2011 only accounted for 2.5% of the world. Obviously, China's PV domestic market lags far behind the industry development, and it does not match our leading position in the world PV manufacturing industry.

Let us assume that if the domestic market opens, the export ratio of China's PV products will drop to 50% by 80%, and the export: domestic = 1:1 (healthy industry ratio), when the export volume to overseas markets will fall. 5.5 GW, about 11 GW. China's PV products in Europe and the United States (2011 installed capacity of 22GW) local market share will drop from the current 75% to 50%. Will local producers in Europe and America still resist such Chinese manufacturers? Will the European and American governments launch a double-reverse on Chinese PV products?

Due to the limited local market, domestic companies have to flock to overseas markets. In order to increase market share and reduce costs, the production capacity has been savagely expanded. The overdraft capacity has been intertwined with the global financial crisis, resulting in a sharp fall in overseas market prices. The overseas market is limited, and it has to retreat to seek the domestic market. It is also a vomiting price war, and it can only continue to expand production for low cost. China's photovoltaic industry is entering a vicious circle of irreversibility.

Is there no market demand in China? Wrong, China's PV market has great potential. I will provide you with a set of data:

1. 1GW photovoltaic power station is about 20 square kilometers, 1000GW is about 20,000 square kilometers, and 1/10 area of ​​Qaidam Basin. With China's current component capacity of 40GW, this requires 25 years of production.

2. At present, China has a building roof area of ​​48 billion square meters. If 10% of the roofs are built with photovoltaic systems, a 500 GW solar cell market will be formed.

Faced with such a large market potential, why is China's domestic market delayed to release, and manufacturers have to be close to each other? In 2011, the price of photovoltaic modules fell by about 50%, and the cost of photovoltaic products dropped rapidly. Based on the current photovoltaic cell efficiency and price, the domestic distributed rooftop photovoltaic system, with the ability to connect to the grid and meet the annual power generation of 1200 hours, the return on investment IRR is 9.3%, and the cost can be recovered in about 8 years. The time has come to open the domestic PV market.

At present, the bottleneck restricting the domestic PV market is not cost and technology, but policy lag. The policy lag is reflected in the difficulty of grid connection, difficult approval, and subsidy.

First, the connection is difficult

Whether it is photovoltaic or wind power, the ultimate investment income path for any new energy project is to rely on power generation. There are two ways to use electricity: 1. Spontaneous use 2. Sold to the grid, and it is transmitted online. For distributed rooftop PV plants, grid requirements must be self-contained and not allowed to be uploaded. Only for centralized ground-based photovoltaic power plants that have been concessionally tendered can power generation be uploaded and the electricity sold. The annual quota of this part of the power station is very small. The limitations of grid connection have greatly limited the development of the photovoltaic market:

1. For distributed rooftop photovoltaic power plants, since they can only be used spontaneously, the construction capacity of the power station must be limited by the maximum power consumption of the owner itself, otherwise excessive power generation can only be wasted. This will result in the owner's roof resources being underutilized.

2. If you want to store too much photovoltaic power, one option is to increase the energy storage unit. However, at present, the battery is expensive and the maintenance cost is high, and the general owner cannot afford it. The extra electricity upload was originally the most economical channel of consumption and is now blocked by the grid.

3. The difficulty of grid connection has curbed the enthusiasm of private capital for investment in photovoltaic power plants. The rooftop photovoltaic power station is actually a stable investment return product. It will create value for the owner's continuous power generation, the risk is lower than the securities products, and the maintenance is very simple, much easier than operating a restaurant, company and other industries. There should have been a lot of market potential.

Failure to ensure the integration of photovoltaic power will not guarantee the interests of PV system investors, which will inevitably limit market development, and ultimately lead to China's domestic market lags far behind manufacturing capacity.

This problem has been forced by the double-reverse of Europe and the United States. Recently, it has seen the dawn. On October 26, State Grid announced the new policy of “Opinions on Doing a Good Job in Grid-connected Services for Distributed Photovoltaic Power Generation” (referred to as “Opinions”). The attitude toward distributed grid connection was completely turned 180 degrees, completely rejected. Change to "support, welcome, service." It is indeed an accident that the State Grid has changed its attitude towards distributed PV grid-connected so fast. It can be said that the industry is shocked. The highlights of the New Deal are reflected in:

1. Support distributed grid connection, and promise to acquire surplus power in full;

2. Free access fee below 6MW;

3. The distributed photovoltaic power generation project is exempt from system backup fees;

4. The grid connection authority is clearly decentralized to the local market company;

5. The grid connection process is about 45 working days;

6. The transformation of the public power grid caused by distributed photovoltaic access, and the connection network access to the public power grid are all borne by the power grid;

If the above policies can be put in place and implemented, it will greatly shorten the time for the integration of distributed photovoltaic power plants and reduce the cost of grid connection. Clearing the biggest obstacle for the domestic PV market. At present, many people in the industry are still skeptical about the change of attitude of the State Grid. Let us continue to pay attention to the implementation and implementation of the New Deal of the State Grid.

Second, the approval is difficult

State Grid's "Opinions" only solves the problem of whether distributed can be connected to the grid. As for how to measure the amount of electricity transmitted online, how to settle it, and how much money is given per kilowatt hour, there is no mention. After discussing with the internal network of the State Grid and eliminating the obstacles of the grid connection, the biggest obstacle for the power station investors is the approval of the power station. The key to this problem is not in the power grid, but in the Development and Reform Commission.

According to the State Council's 2004 Catalogue of Investment Projects Approved by the Government, the investment and construction projects of energy power station projects need to be approved by relevant government departments. The provisions for wind power plants are: the total installed capacity of 50,000 kW and above is invested by the State Council. The competent department approves and the remaining projects are approved by the municipal government investment department. In this Catalogue, there is no photovoltaic power station first (of course, photovoltaics have not yet emerged in 2004), and only wind power projects below 50MW are required to be approved by the Municipal Development and Reform Commission. We also believe that PV power plant projects below 50MW are also subject to the approval of the Municipal Development and Reform Commission.

The approved documents require that “the project application report prepared by the engineering consulting organization with Grade A qualification is in 5 copies”. It is understood that there are about 200,000 sets of project application reports for Grade A qualifications, as well as urban planning, environmental assessment, land, etc. Approval report. These reports are all down and are estimated to cost 500,000. Usually a 50KW distributed photovoltaic power plant has a total investment of 500,000, and a 3KW distributed photovoltaic power station can basically meet the daily electricity demand of an ordinary household. Isn't this a joke with such high approval fees and cumbersome approval procedures?

Obviously, this approved catalogue has been unable to adapt to the development requirements of distributed new energy. The original project approval process is a large-scale energy investment project for corporate investment. As a general resident to build a distributed photovoltaic power station on its own roof, 1. Not a legal person 2. Does not affect the urban planning 3. Does not affect the land use, the house is its own private property rights 4. Does not affect the environment, should not require the project approval of the National Development and Reform Commission. The project approval policy of the National Development and Reform Commission should keep pace with the times and make corresponding adjustments and clarifications:

1. Add the relevant content of the PV power plant in the Catalogue of Investment Projects Approved by the Government, and specify the approval threshold of the PV power plant and the approval authority of the approval authority.

2. The approval policy of the National Development and Reform Commission should be matched with the new network of the State Grid. Since the State Grid allows free access to distributed interconnections below 6MW, the NDRC approval should be adjusted to require more than 6MW of distributed PV projects, and the distributed PV projects below 6MW should be changed to the filing system.

Project approval is only one of the approval links for power station construction. At present, a power station from the application for project to the final grid-connected power generation, through the project approval, roads, feasibility study report, environmental assessment, planning, grid connection, land licensing, security, acceptance and other key links involving at least nine governments The department (including the power grid), covering 48 chapters or licenses, has a long road. This is the cruel administrative environment faced by domestic PV power plant investors. There are too many approval links, power rent-seeking, breeding corruption, delaying business opportunities, and bringing huge additional burdens to investors. Does such an approval policy want to promote the development of green new energy or hinder its development? Or is it a private pocket that promotes the development of new energy as an excuse? In order to promote the development of the photovoltaic terminal market, it is necessary to simplify the administrative examination and approval procedures, remove obstacles in project approval, and completely dispel the doubts of power station investors.

Third, the subsidy is difficult

Distributed power plants are not connected to the grid for grid connection, but to sell excess power to the grid. Therefore, the follow-up Treasury's electricity price subsidy policy for distributed photovoltaic power generation will be a key to whether the domestic PV market can be truly opened. The State Grid's "Opinions" have been issued, and the follow-up power subsidy policy is widely concerned and expected by the industry.

Many people in the economic circles are questioning that PV is an industry that relies on subsidies to survive. It is said that "the government should not take taxpayers' money to maintain an industry that relies on subsidies to survive." Let us look at the practices of European and American governments. Germany is the first country in the world to implement the photovoltaic feed-in tariff method (FIT). According to the “EU Industry Subsidy Report” published by the WTO, the German government has provided the solar photovoltaic manufacturer with a solar roof plan (HDTP) of 510 million euros. Subsidies, Germany's subsidies for photovoltaic power generation prices in 2010 exceeded 11.8 billion euros. The promulgation of these support policies has made Germany a global leader in solar energy utilization. The United States is also unwilling to lag behind. Since the implementation of the Economic Stimulus Act in 2009, the annual amount of support for renewable energy has reached 16 billion US dollars. Since 2009, the Chinese government has subsidized renewable energy on average no more than 15 billion yuan (70% of which is for wind power). The relatively small subsidies of the Chinese government have also become the targets of many Chinese media and economists who have criticized the Chinese PV industry. How arrogant and short-sighted it is. Before the net price is achieved (whether on the power generation side or on the electricity side), PV is a policy market. Without the support of grid-connected, there is no market without subsidies, there is no application and market competition without market, and there is not enough opportunity and motivation to improve itself. This will be a vicious circle. The current blood transfusion is to let it through early childhood. When it can be independent, the market is boundless, and the benefits are endless. You will find that the current blood transfusion is worthwhile.

The current state subsidies for distributed photovoltaic systems are mainly the “Golden Sun” policy. The Golden Sun subsidy is about 50% of the system cost, but the ratio is enough but the threshold (1MW) is too high and the total amount is too small. It is enough for ordinary households to use only 3KW of photovoltaic system for daily use. The result of such a high threshold is to exclude the huge distributed small roof market from policy subsidies. At the same time, only 600MW was approved in 2011, and it was only 1.71GW in 2012. Compared with our 40GW capacity, it is not enough.

In order to improve the economic input of the state, it is advisable to adopt the electricity price subsidy policy, taking the actual power generation as the measurement standard of the incentive policy, reducing the management costs such as project inspection and audit, directly encouraging the multi-green power, and achieving the actual energy-saving and emission reduction effect. . According to media reports, the relevant government departments are planning to adjust the subsidy policy for the “Golden Sun” distributed photovoltaic power generation demonstration project, turning the existing “pre-installation subsidy” into “subsequent power subsidy” and issuing subsidy funds based on the approved electricity. . This is also an after-the-fact subsidy method that is in line with international standards and focuses on the actual effects of power generation. Secondly, the subsidy target should not set the threshold. Regardless of the size of the distributed power station, it should be treated equally. Whether it is a few KW residential roof or a few MW industrial plant roofs, all subsidies are supported.

We hope to see a universal, objective, equal and simple electricity subsidy policy. The billing measurement shall be based on the user-side uploading meter. For distributed PV integration of individual residents, the grid should not only give part of the on-grid price of the distributed power generation investor (owner), such as the on-grid price of the desulfurization coal-fired unit, and then let it go to the Development and Reform Commission or the Ministry of Finance to apply for the remaining subsidy separately. The difference is the acquisition of the power generation by the grid in accordance with the unified on-grid tariff. That is to say, the grid should be the only settlement interface with PV power plant investors. The on-grid electricity price of photovoltaic power generation projects is higher than the local grid-connected electricity price of local desulfurization coal-fired units, and is supplemented by the national renewable electricity price. As for how the State Grid and the Ministry of Finance and other relevant departments settle the difference, it has nothing to do with the distributed power generation investor (owner). Only in this way can the application process for subsidies be simplified to ensure the return on investment of investors.

Further, the individual believes that the most ideal situation is that the state stipulates a unified PV distributed feed-in tariff, similar to the German FIT policy, rather than staying on the subsidy for the uploading of electricity. Its effectiveness has been proven in Europe and America. Germany is the country that the “On-grid Electricity Price Law” is first open to photovoltaic power generation. The government stipulates that grid companies must unconditionally purchase high-priority photovoltaic power generation, and then the government subsidizes the national power grid, that is, the mandatory PV feed-in tariff-Feed-In-Tariff:FIT . The basic principles of the bill are: 1. Mandatory access to the network 2. All acquisitions 3. The prescribed electricity price 4. Declining year by year. This bill completely solves the network problem that plagues renewable energy generation, provides a guaranteed return on investment for PV users, and greatly promotes the expansion of the German PV market. We call on China's "Compulsory Photovoltaic Electricity Price Law" as soon as possible.

Conclusion

As long as the above three major obstacles are lifted, the domestic PV market will be opened immediately, and at least half of the excess capacity will be absorbed. Why do you have to look at the face of Europe and America? ! In the face of the photovoltaic crisis, the government should save photovoltaics, but to save the photovoltaic industry, not to save a photovoltaic company. What PV needs most at the moment is not money, not land, but policy and market environment. Through regulation and guidance, macro-coordination, and creating a smooth, fair, open and transparent market competition environment and power grid platform for new energy is to save photovoltaics. Companies can let the market choose.

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