**Abstract**
At the end of last month, the photovoltaic industry anticipated that the long-awaited multi-day photovoltaic power generation subsidy policy would soon be finalized. Key details regarding on-grid electricity tariffs, subsidy rates, and implementation deadlines—issues that have been at the center of concern for power station investors—have now become clearer. For residential household distributed photovoltaic systems, how much revenue can be generated by sending 1 kWh of electricity to the grid? What does this new subsidy policy mean for the industry as a whole?
**Earning 0.87 Yuan per kWh Sold to the Grid**
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 clarified the benchmark on-grid tariff policy for photovoltaic power plants. Based on solar resource availability and local construction costs, the country is divided into three categories of regions, 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 rate of 1 yuan per kWh for traditional photovoltaic projects.
For distributed photovoltaic systems, a different model applies: instead of a fixed tariff, a feed-in subsidy is provided based on the amount of electricity generated. The subsidy rate is set at 0.42 yuan per kWh. Gu Wei, an industry expert, explained that both businesses and individual residents who install distributed photovoltaic systems (with a capacity under 6 MW) are eligible for this state subsidy.
When surplus electricity is fed back into the grid, it is purchased at the desulfurization coal price, currently at 0.45 yuan per kWh. Adding the national subsidy, the total income from selling 1 kWh to the grid reaches 0.87 yuan. For enterprises, self-consumption of generated electricity is more cost-effective, as industrial electricity prices are typically higher than the desulfurization coal price.
For example, if the electricity cost is 0.637 yuan per kWh, using it yourself saves not only that amount but also the 0.42 yuan subsidy, resulting in a total benefit of 1.057 yuan per kWh. This makes it more profitable than the benchmark rate of 1 yuan per kWh.
**Beneficial for Residents, More Households Expected to Participate**
The benefits for residential users are significant. Before the subsidy policy was introduced, only large enterprises could apply for the benchmark tariff. Now, with clear subsidy guidelines, more individuals are expected to invest in home-based photovoltaic systems.
In Wuxi, five new residential photovoltaic projects were launched in the past two months, bringing the total number of distributed projects in the city to 23. Of the five new ones, four are owned by residents, with two located in Wuxi City and two in Jiangyin. One of them is Shen Zhongjie, a resident of Nanchang District’s Yinxingyuan neighborhood.
Shen had the idea of installing a rooftop photovoltaic system last year to make use of his unused roof space and promote green living. His house is a multi-story building with a sloped roof that offers about 40 square meters of usable space. He has already coordinated with the property management and neighbors to ensure smooth installation.
As a professional in the photovoltaic industry, Shen is well-equipped to handle the technical aspects. With the national policy becoming clearer, he has already prepared the design and equipment and submitted a grid connection application to Wuxi Power Supply Company three weeks ago.
His system will have a 3 kW capacity, utilizing 12 250W solar panels on his 40-square-meter roof. It is expected to generate around 260 kWh per month in Wuxi. Currently, seven households in Jiangyin have applied for similar projects, mostly professionals in the field. Due to space constraints, these installations are mainly found in villas and private homes.
**Subsidy Policy Sparks Industry Competition**
With the growing potential of distributed photovoltaics, some individuals are starting to build their own systems to gain experience. As the market expands, they aim to offer full-service solutions—from design to installation—for other businesses or homeowners.
Competition is already intensifying. Among the households applying for grid connection in Wuxi, several are industry professionals who assist residents in setting up their systems.
Although interest from residents is rising, industry insiders caution that even with the subsidy, it may take 6–7 years to recoup the investment for a 4 kW residential system. Once applications are submitted, the power supply department conducts extensive site surveys and planning, which can lead to wasted resources if the project isn’t completed.
For enterprise-level distributed PV projects, environmental impact assessments and provincial approvals are required. However, for residential projects, the process is simpler: just apply directly to the local power company. After application, each household requires a separate access plan and at least two electric meters to track self-generation, grid usage, and surplus energy.
Other concerns include structural load assessments and the environmental impact of rooftop solar installations. These issues need to be addressed as more households opt for distributed photovoltaics. To better serve users, the power supply department is gradually refining its procedures for grid connection, acceptance, and operation.
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