China sets a record high target for solar energy installation 

Source: Coco Liu, E&E Asia correspondent • Posted: Thursday, March 19, 2015

Despite the fact that its newly added solar panel installations fell short of the target last year, China has announced an even more ambitious installation target for 2015.

According to a government document ClimateWire obtained from industry players, China’s National Energy Administration plans to install 17.8 gigawatts of solar panels this year.

This is a record high target for the Chinese solar market, which barely existed before 2008. It also surpasses previous expectations — in a drafted plan issued earlier this year, China was considering an annual installation of 15 GW.

The higher installation target is not the only change in the final policy. Unlike the drafted plan, it has no mention of a breakdown into utility-scale solar farms versus smaller distributed solar projects, which will instead be left for provincial governments to designate.

Analysts welcome such a move, saying that it will allow the Chinese solar market to grow in line with market demand, rather than requests from policymakers. Last year, Beijing insisted that solar companies should move to distributed solar projects, even though the companies had trouble getting financing for rooftop installations. As a result, China added 10.6 GW of solar panels in 2014, lagging far behind its set target of 14 GW.

Guidelines with carrots and sticks

To help solar energy installation move faster, the newly announced policy also has strict guidelines for provincial governments, requiring them to submit their solar construction plans by the end of April, or risk losing some of their installation quota to other provinces.

Provinces that achieve good construction progress by midyear could have their solar quota raised, according to the policy.

There are also efforts to ensure that China’s desire for cleaner energy won’t lead to an unplanned solar expansion. For instance, the policy notes, grid-connected solar panels must make up half of the 2015 installation target in Chinese provinces by the end of October; otherwise, those provinces will face a cut in their installation quota for the following year.

All of those are good news for the Chinese solar industry. “Even if we can’t say that China will 100 percent for sure meet its 2015 installation target, at least we can expect a sharp increase in solar installation this year compared with a year ago,” said Ray Lian, an analyst at market research firm IHS Inc.

“This definitely shows the government’s support towards the solar industry,” added Wang Zhixin, a spokesman at Yingli Green Energy. “We are now producing at a full capacity.”

According to government data, the Chinese solar market absorbed one-third of solar panels produced in the country last year. The new installation drove China’s total solar capacity to 28.05 GW at the end of 2014. Of that capacity, 83 percent is at solar farms.