Uniform Photovoltaic Power Generation Goes on Benchmark Price Solar Power to Enter Industrialization

For more than 90% of China's solar cell manufacturers that rely on exports, a notice from the National Development and Reform Commission is undoubtedly a great boon. On August 1, the National Development and Reform Commission issued the "Notice on Perfecting the On-grid Electricity Tariff Policy of Solar Photovoltaic Power Generation." It was clarified that the on-grid tariffs for photovoltaic power generation projects approved before and after July 1 this year were 1.15 yuan and 1 yuan per kilowatt-hour respectively.

Industry insiders have stated that the launch of the PV on-grid price “GB” is a real promoter of the domestic PV market, which is conducive to changing the status of China's solar industry over-reliance on overseas markets, which is conducive to the growth of domestic solar power companies, and the solar industry is really beginning to develop. Enter the industrialization stage. In particular, the declining demand in the European market and the continuous decline in export prices have triggered the start of the domestic market, which has a positive effect on the healthy development of the entire industry.

"National Standard" electricity prices approaching the cost of power generation began two years ago, and the industry has been calling for the country to specify the benchmark price of photovoltaic electricity, so that the entire industry has a clear cost-effective accounting standards. However, due to the high price of upstream photovoltaic raw materials and photovoltaic modules, the cost of photovoltaic power generation cannot be reduced to a reasonable level, and it is difficult for the state to formulate an on-grid tariff that can be actually promoted.

However, after two years of development, photovoltaic power generation technology has continued to mature, raw material prices have been substantially reduced, and the cost of photovoltaic power generation has also dropped significantly. This has created conditions for setting the benchmark price of photovoltaic power generation on the Internet.

According to the notice of the National Development and Reform Commission, the solar photovoltaic power generation projects that were approved for construction before July 1, 2011, completed and put into production on December 31, 2011, and have not yet been approved by the Development and Reform Commission, have been uniformly approved at the on-grid tariff of 1.15 yuan per kilowatt-hour; July 2011 Solar photovoltaic power generation projects approved daily and thereafter, and solar photovoltaic power generation projects approved before July 1, 2011 but not yet completed and put into production as of December 31, 2011, except for Tibet, which still implements the on-grid tariff of 1.15 yuan per kilowatt-hour The on-grid tariffs of other provinces (autonomous regions and municipalities) are all implemented at the rate of 1 yuan per kilowatt-hour.

“This photovoltaic power generation benchmark price for the Internet has already approached the cost of power generation for domestic photovoltaic power plants. If coupled with subsidies from local governments, domestic photovoltaic power companies can finally make profits, which will certainly promote the development of the domestic photovoltaic industry.” Wang Zhixin, head of propaganda department of Yingli Green Energy Holdings Co., Ltd., a business of photovoltaic components business, told reporters.

Previously, the on-grid electricity price of China's solar photovoltaic power generation projects was determined by way of concession bidding, and the on-grid tariff of each project was different. In the 13 projects of China's second round of solar photovoltaic concession bidding in August 2010, the minimum on-grid price was 0.7288 yuan/kWh, and the maximum on-grid tariff was 0.9907 yuan/kWh, while China’s first photovoltaic franchise in July 2009. The right bidding project --- on-grid tariff for the 10 MW power project in Dunhuang is 1.09 yuan per kWh. However, the above prices cannot truly reflect the cost of photovoltaic power generation.

Promote the domestic market to really start the rapid development of China's photovoltaic manufacturing industry in the past two years, the continuous expansion of production capacity, especially the production capacity of polysilicon and photovoltaic modules, currently accounts for 50% of global production, of which solar cell output exceeds 8G watts, ranking first in the world . However, China's photovoltaic solar cells have always been export-oriented, with more than 90% of their output being exported overseas. Among them, Germany, Spain, and Italy are the three main countries. In terms of the domestic market, China installed less than 400 megawatts of photovoltaic power generation in 2010, accounting for 3% of the world's total installed capacity.

However, Germany and Spain continued to reduce the subsidy standard, which led to the continuous shrinking of demand in the largest photovoltaic market in Europe, which also caused a sharp drop in the prices of polysilicon and photovoltaic modules since April of this year. As of the end of June, the prices of polysilicon and photovoltaic modules have fallen by around 30%. This puts pressure on domestic PV module manufacturers and polysilicon producers. When the domestic market can really start, it becomes a topic of high concern for the photovoltaic industry. At this time, the country clearly defined the PV benchmark price, and it is undoubtedly the photovoltaic industry at a crucial moment.

Changjiang Securities pointed out in its report that the release of the solar power benchmark price is a sign that the domestic market is really starting. Before this, the market expects the introduction of photovoltaic benchmark price will be in 2012 -2013. The introduction in advance will help promote the start of the domestic market. According to the plan of the National Energy Administration, by 2015, China's installed solar energy capacity will reach 10 million kilowatts or more; by 2020, the installed solar energy capacity will reach 40 million kilowatts or more.

Luo Bo, a solar energy analyst at Bloomberg, believes that the two on-grid tariffs that are confirmed can guarantee that companies have a certain internal rate of return. The introduction of the policy is not only for polysilicon in the upper reaches of the photovoltaic industry, but also for photovoltaic components in the middle reaches, and inverters. For electric field operators, it is undoubtedly a big plus.

Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission, pointed out that the country’s final target of 1 yuan per kilowatt-hour for PV power generation is no doubt much more favorable for provinces with sufficient western lighting. Because this will attract more corporate funds to the west in exchange for higher returns.

While the bottleneck of grid-connected networks is still to be announced, the industry has also expressed concern about the sounding of photovoltaic power grid benchmark electricity prices. The benchmark price proposed by the National Development and Reform Commission adopts a nationwide price standard. In other words, whether in the east or the west, it is based on the standard of 1.15 yuan and 1 yuan per kilowatt-hour, which brings photovoltaic grid-connected power to the grid. A potential problem.

The western region of China enjoys sufficient sunshine and low land costs, which is beneficial to reduce the cost of photovoltaic power plants, while the illumination in the eastern regions is relatively weak, and the high cost of land makes the operating costs of photovoltaic power plants high. For example, in China's Tibet, Qinghai, Xinjiang, Inner Mongolia and other regions, the annual sunshine time is 3,000 hours or more, and the effective power generation hours all reach 1,500 hours. In addition, the land prices are low. At present, the cost of power generation for some photovoltaic power plants is less than 1 Yuan money, even if the state does not subsidize, is profitable; while the photovoltaic power plant in the eastern region has a much higher cost of electricity generation, and the cost of power generation in many places is more than 1.5 yuan. Even if the state subsidies, it is still in a state of loss. In particular, the earlier the power plant is built, the higher the cost.

In this context, it is bound to push power generation companies to invest more power station projects in the northwestern provinces than in the southeastern coastal areas where electricity demand is high. A technical staff of CGN Solar, a company that develops solar energy projects in Qinghai, told reporters that the power grid construction in the northwestern provinces is relatively backward. If solar energy is developed on a large scale, it is likely that wind power will encounter the same problem as grid connection. It is reported that in the past two years, the development of wind farms in Inner Mongolia, Gansu, and other places has not been resolved due to grid connection problems, leaving one-third of the wind turbines idle, and even after many wind farms have been built, they have “sun”. “The relevant national competent authorities must fully coordinate the issue of grid connection in order to avoid the waste of investment. For those enterprises and local governments that are optimistic about solar power stations, they must also be fully prepared for grid connection issues. A lot of trouble came."