210 G. CHEN
nationwide subsidy of 0.45 yuan for each kWh of electricity generated by
solar PV equipment while many provincial governments decided to offer
additional subsidy of 0.25–0.3 yuan on top of that, with the unified term
of 20 years.
The NDRC institutionalized the nationwide subsidy to all solar PV
power plants through announcing a subsidy level of 0.42 yuan per kWh
in a circular released in August 2013 (NDRC 2013), a 20% increase from
the planned level of 0.35 yuan per kWh which had been proposed in its
draft version half a year ago. With such a higher-than-expected government subsidy granted to local solar power plants, China, now the world’s
fourth-largest solar PV power producer, could witness its PV installed
capacity grow exponentially in the next few years, just as its wind power
market had performed from 2005 to 2010.
Other Incentives for Renewables. Besides feed-in tariffs, China’s Renewable Energy Law also introduced other schemes like Renewable Portfolio Standard (RPS) and “mandatory grid-connection” that had been
successful in advancing the cause of renewables in Europe and North
America. From the Chinese version of RPS, which had originally drawn
up plans to increase the proportion of renewable energy (including large
hydropower) in the primary energy consumption from 7.5% in 2005 to
15% in 2020, it was evident that the government has prioritized the
development of wind power over the solar power generation in the midterm. Excluding hydropower, the aforementioned RPS target was further
broken down by the NDRC as 30 GW from wind, 30 GW from biomass
and 1.8 GW from solar photovoltaic (Zhang 2005, p. 1), in which solar
PV would be projected to produce only 6% of the total wind power
generation. The Chinese government subsequently revised up the RPS
goal that aimed at 20% of its energy from renewable sources by 2020,
with a widened gap between elevated wind capacity of 100 GW and solar
capacity still at 1.8 GW.
The Renewable Energy Law’s “mandatory grid-connection” part
required grid companies to “buy the grid-connected power produced
with renewable energy within the coverage of their power grid,” and
to “provide grid-connection service for the generation of power with
renewable energy” (PRC Renewable Energy Law 2005, Article 14). To
help grid companies to share such costs with end users, the law allowed
grid companies to include grid-connection expenses paid by them for the
purchase of renewable power and other reasonable expenses in the power
nationwide subsidy of 0.45 yuan for each kWh of electricity generated by
solar PV equipment while many provincial governments decided to offer
additional subsidy of 0.25–0.3 yuan on top of that, with the unified term
of 20 years.
The NDRC institutionalized the nationwide subsidy to all solar PV
power plants through announcing a subsidy level of 0.42 yuan per kWh
in a circular released in August 2013 (NDRC 2013), a 20% increase from
the planned level of 0.35 yuan per kWh which had been proposed in its
draft version half a year ago. With such a higher-than-expected government subsidy granted to local solar power plants, China, now the world’s
fourth-largest solar PV power producer, could witness its PV installed
capacity grow exponentially in the next few years, just as its wind power
market had performed from 2005 to 2010.
Other Incentives for Renewables. Besides feed-in tariffs, China’s Renewable Energy Law also introduced other schemes like Renewable Portfolio Standard (RPS) and “mandatory grid-connection” that had been
successful in advancing the cause of renewables in Europe and North
America. From the Chinese version of RPS, which had originally drawn
up plans to increase the proportion of renewable energy (including large
hydropower) in the primary energy consumption from 7.5% in 2005 to
15% in 2020, it was evident that the government has prioritized the
development of wind power over the solar power generation in the midterm. Excluding hydropower, the aforementioned RPS target was further
broken down by the NDRC as 30 GW from wind, 30 GW from biomass
and 1.8 GW from solar photovoltaic (Zhang 2005, p. 1), in which solar
PV would be projected to produce only 6% of the total wind power
generation. The Chinese government subsequently revised up the RPS
goal that aimed at 20% of its energy from renewable sources by 2020,
with a widened gap between elevated wind capacity of 100 GW and solar
capacity still at 1.8 GW.
The Renewable Energy Law’s “mandatory grid-connection” part
required grid companies to “buy the grid-connected power produced
with renewable energy within the coverage of their power grid,” and
to “provide grid-connection service for the generation of power with
renewable energy” (PRC Renewable Energy Law 2005, Article 14). To
help grid companies to share such costs with end users, the law allowed
grid companies to include grid-connection expenses paid by them for the
purchase of renewable power and other reasonable expenses in the power