An opportunity for improved solar PV quality
Despite this, there is hope that this could mean a positive change to the Chinese solar landscape in the long-term. Chinese developers looking to invest elsewhere than on their home ground could help drive competition in emerging markets. The increased competition, combined with the lower cost of PV modules will bring down prices at competitive auctions and we will likely see more world-record-low tariffs for solar PV in the coming months.
For the Chinese government, the move is sure to ease financial pressure on the renewable subsidy pool that failed to cover expenses in a sustainable fashion.
On the side of developers and consumers, we expect the policy change to motivate a focus on better quality. Competitive auctions have elsewhere shown to boost technological innovation, as developers attempt to increase efficiency and lower cost.
Wind auctions drive fierce competition and further price reduction
The latter upside is likely to extend to the Chinese wind industry, where auctions have just been announced to supersede the current Feed-in-tariff (FIT) scheme. With the introduction of a wind auction scheme from 2019, China’s National Energy Administration (NEA) confirmed prevailing rumours about further FIT reductions on 24 May 2018.
The move comes sooner than the industry expected, as the NEA aims to reduce subsidy pressure on the central government and reach grid parity by 2020. Both developers of new onshore wind projects in the provinces that have not yet published a 2018 Development Plan and developers of new onshore projects approved from the beginning of 2019 will have to now win in auctions.