China’s National Development and Reform Commission (NDRC) released the “Improving Issues Related to Feed-in Tariffs for Solar Photovoltaic” notice on April 30, confirming the solar FIT rates for this year. Highlights of the new FIT payments is listed as follows:
1. Guidance FIT levels for ground-mounted projects
FIT for ground-mounted projects is set as guidance FIT levels. The FIT rates (tax included) by zone:
- Resource Zone I: RMB 0.4/ kWh
- Resource Zone II: RMB 0.45/kWh
- Resource Zone III: RMB 0.55/kWh
2. FIT payments will be allocated under auction mechanism for this year’s ground-mounted projects, with a maximum rate not exceeding guidance FIT levels. With local coal-fired FIT levels as the benchmark, the FIT payment amounts under the benchmark will be paid by local electric grid; the amounts above the benchmark will be paid by the Renewable Energy Development Fund.
3. Projects that can connect to the grid by June 30 are eligible for FIT payments under the “Issues Related to the 2018 Solar Power Generation” notice (Renewable Energy Amendment No. 823, 2018). Projects that are connected to the grid after June 30, on the other hand, will follow the guidance FIT level under the “Improving Issues Related to Feed-in Tariffs for Solar Photovoltaic” notice (Feed-in Tariff Amendment No. 761, 2019) announced on Monday.
Poverty alleviation projects
For ‘village-level’ poverty alleviation PV projects that are eligible for the Renewable Energy Fund, the FIT payments will be allocated by resource region.
- Resource Zone I: RMB 0.65/kWh
- Resource Zone II: RMB 0.75/kWh
- Resource Zone III: RMB 0.85/kWh
Commercial and Industrial (C&I) distributed projects
The FIT for C&I distributed projects with “self-consumption + excess power feeding back into the grid” model is RMB 0.10/kWh.
C&I distributed projects with 100% feed-in model will be subject to the same guidance level applied for centralized ground-mounted projects in the resource zones.
C&I distributed projects are subject to competition for FIT payments, with maximum bidding price not exceeding the guidance level applied for resource zones and RMB 0.10/kWh as the ceiling FIT rate under FIT subsidy scheme.
Residential systems designed for “self-consumption + excess feed-in” and “100% feeding into the grid” are eligible for a FIT rate of RMB 0.18/kWh and are included in the 2019 FIT subsidy scheme.
The new solar FIT will be effective starting July 1.
Considering the overall grid consumption and the prioritization of unsubsidized projects for consumption quota based on the new policy, both ground-mounted and C&I distributed projects will keep driving demand through the first half of 2020.
The 2019 ground-mounted and C&I distributed projects will be competing under a unified national bidding process. As the maximum FIT for C&I distributed projects sits at RMB 0.10/kWh, ground-mounted and C&I distributed projects can compete fairly without any taking advantage of the resource zones. However, most developers will favor ground-mounted projects to increase chances to win the bids, resulting in the weakening demand from C&I distributed projects.
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