By Julian Wong Jul.22.2009
In: policy, solar

Moon Landing, Solar Eclipse, and nowSolar Takeoff! China launches Golden Sun subsidies for 500 MW of PV projects by 2012

This post is dedicated to my “golden son/sun”, Keane, who just turned one yesterday.

It is with interesting irony that China has launched its much anticipated Golden Sun program of incentives for the deployment of 500 MW of large-scale solar PV projects throughout the country the day after the 40th annivesary of the America’s landing on the moon, AND a day before an actual solar eclipse.

The “Apollo Project” of our generation as summed up nicely by my colleague, not out there in space, but right here on Earth:

Our top planetary mission for the foreseeable future must be to stop destroying the one climate hospitable to the one civilization that we know of in the entire galaxy.

China is doing its part, pulling ahead in the race for a sustainable Earth, as it launches its domestic solar industry.  It is thus quite ironic that as parts of China experiences a solar eclipse today, what is in fact transpiring in the solar industry is the opposite–a new dawn.

Reuters has actually done a decent job of hitting the main points of the Golden Sun policy (《金太阳示范工程财政补助资金管理暂行办法》; original Chinese document here), so we’ve stolen their summary and reproduced them in the following bullet points:

  • The government will subsidize 50 percent of investment for solar power projects as well as relevant power transmission and distribution systems that connect to grid networks.
  • For independent photovoltaic power generating systems in remote regions that have no power supply, the subsidy will rise to 70 percent, the ministry said in an announcement on its web site.
  • Grid companies are required to buy all surplus electricity output from solar power projects that generate primarily for the developers’ own needs, at similar rates to benchmark on-grid tariffs set for coal-fired power generators.
  • To qualify for the subsidy, in addition to other requirements, each project must have a generating capacity of at least 300 kilowatt peak, while construction will have to be completed in one year and operations will have to last for at least 20 years.
  • The government plans to install more than 500 megawatts of solar power pilot projects in two to three years.
  • The total generating capacity in such pilot projects in each province in principle should not exceed 20 megawatts [GLF note: a most interesting target considering that for the full 500 MW of subsidized project to be deployed, almost all the provincial-level jurisdictions would need to have such a qualifying solar project] .

The policy also emphasizes grid-connectivity of projects (which shows that China is learning from its sore lessons from its wind industry) and the approval of various components of the solar systems by an unnamed “state approval organization” (which suggests that perhaps they are forming some sort of standards body, which will go a long way in enhancing product quality).

If you are wondering how this relates to the Solar Roofs Program announced in March, its simple–the Golden Sun program targets larger utility-scale projects, probably mounted on the ground instead of buildings, and more than 300 kw, and complements the Solar Roofs Program, which as the name implies, is meant for roof top projects not less than 50 kw.  The Golden Sun policy explicitly excludes projects which fall under the Solar Roofs Program from benefiting under the Golden Sun program.

How impactful will this program be?  500 MW of installed capacity, in the grand scheme of things, is not huge, especially when one considers that China will probably revise its 2020 solar target to 10,000 MW of installed capacity.   But given the nascent nature of China’s solar domestic market, this 500 MW program, which comes just a few months after the landmark solar roofs program, send a strong signal that China is serious about developing its domestic solar market, and will undoubtedly stimulate more activity in domestic deployment by enterprises outside of the subsidy program (like what the Solar Roofs prorgam did), and lends further support to my earlier prediction that 2009 will be remembered as the Year of Solar.

Picture credit: a2zCharms

Comments (3)

  1. Tao Jul.23.2009@5:23 am Reply

    Hi Julian, thanks for the blog. I missed the news but fortunately picked it up from your blog. As far as I can see, the subsidy still focus on the installation/capacity of generation, rather being linked with actual electricity generation. Although there is a requirement that the state grid company willl have to buy all the surplus electricity from the golden sun solar PV programme, this is the same as for wind which is usually not implemented so well at provincial level mostly because of the vested interests. So we probably cannot say that “… China is learning from its sore lessons from its wind industry”. Anyway, this is a very good news for China’s PV industry and I do hope it will learn from its wind industry and do better this time.

  2. Julian Jul.23.2009@7:58 am Reply

    Hey Tao, I agree, a focus on generation rather than installed capacity is always going to be a stronger policy. I would make a further critique of the details of the policy — as phrased, this policy doesn’t necessarily reward the most cost-efficient project developer by promising to subsidize a fixed percentage of a project without mentioning any sort of cap. On the other hand, the government continues to wield a fair share of discretion in project approval, including equipment approval. Perhaps, also, more details need to be flushed out on the implementation end.

  3. Tao Jul.23.2009@12:15 pm Reply

    Yes, I agree with you. Generally the implemtation end from the program in each place will have more to say about “the evil is in the details”.

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