**Abstract**
At the end of last month, the photovoltaic industry anticipated that the long-awaited multi-day solar power generation subsidy policy would finally be released. The key concerns for power station investors—such as on-grid electricity prices, subsidy standards, and implementation deadlines—have now been clarified. For residential distributed photovoltaic power stations, how much does it cost to send 1 kWh of electricity to the grid? What does this new subsidy mean for the industry?
**Revenue from Selling 1 kWh to the Grid: 0.87 Yuan**
On August 30th, the National Development and Reform Commission issued a notice titled "Promoting the Healthy Development of the Photovoltaic Industry through Price Leverage," which outlined the benchmark on-grid tariff policy for solar power plants. Based on regional solar resources and construction costs, the country is divided into three types of resource areas, each with different pricing standards: 0.9 yuan, 0.95 yuan, and 1 yuan per kWh. Jiangsu Province falls under the third category, enjoying a 1.0 yuan per kWh on-grid price.
For traditional solar power plants, this is the standard. However, for distributed photovoltaic projects, the government offers a feed-in tariff subsidy based on the amount of electricity generated. The subsidy rate is set at 0.42 yuan per kWh. According to Gu Wei, regardless of whether it's a business or an individual resident, as long as the project is a distributed photovoltaic system with a capacity under 6 MW, it can receive a state subsidy of 0.42 yuan per kWh.
When electricity is fed back to the grid, it is priced at the desulfurization coal rate, which is currently 0.45 yuan per kWh. Adding the national subsidy, the total income for sending 1 kWh to the grid becomes 0.87 yuan.
"Enterprise-based distributed projects are more cost-effective when they use the electricity themselves," said Gu Wei. The current industrial electricity price in China is higher than the desulfurization coal price, making self-consumption even more beneficial. For example, if the electricity price is 0.637 yuan per kWh, using it directly saves 0.637 yuan, plus the 0.42 yuan subsidy, totaling 1.057 yuan per kWh—a better return than the 1 yuan benchmark price.
**Residential Benefits and Growing Interest**
The benefits for residents are significant. Before the subsidy policy was introduced, only enterprises capable of applying for the benchmark tariff could install photovoltaic systems. Now, with clear subsidy rules, more homeowners are expected to invest in residential photovoltaic systems.
In Wuxi, five new distributed projects were launched in the past two months, bringing the total number of such projects in the city to 23. Of these, four are residential, with two located in Wuxi City and two in Jiangyin. Each has an installed capacity between 2 kW and 5 kW.
Shen Zhongjie, a resident of Nanchang District, is one of the early adopters. He has been planning to build a home photovoltaic system for years, aiming to make full use of his rooftop space and promote green energy. His house is a multi-story building with a large sloped roof, offering 40 square meters of usable space. After discussions with the property management and neighbors, he secured permission to install the system.
As a professional in the photovoltaic industry, Shen has already prepared the design and equipment. He submitted a grid connection application to Wuxi Power Supply Company three weeks ago. His system will have a 3 kW capacity, with 12 panels of 250 watts each, generating approximately 260 kWh per month in Wuxi.
So far, seven households in Jiangyin have applied for distributed photovoltaic projects. Most applicants are industry professionals who prefer to install systems in villas or private homes due to space constraints.
**Subsidy Policy Sparks Industry Competition**
With the future potential of distributed photovoltaics, some individuals are starting their own projects to gain experience. They aim to offer comprehensive services—from design to installation—for others once the market expands.
Currently, competition is intensifying. Some industry professionals are helping residents install systems, taking advantage of the growing demand.
Despite rising interest, industry insiders warn that even with the subsidy, it may take 6–7 years to recoup the investment for a 4 kW residential system. Once applications are made, the power supply department conducts extensive site surveys and prepares access plans. If the project isn't completed, it leads to wasted resources.
For enterprise-based projects, an environmental impact assessment is required, and approval from the Provincial Energy Bureau is needed. However, for residential systems, the process is simpler. Residents just need to apply at the local power supply company, where each household undergoes an on-site inspection and receives a customized access plan. Each system requires at least two electric meters to track self-generation, grid import, and export.
Other issues, such as building load-bearing assessments and environmental impacts, also need to be addressed. As more households apply, the power supply department is gradually improving its procedures to better serve users.
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