Recently, the National Development and Reform Commission announced new subsidy rates for distributed photovoltaic (PV) systems connected to the grid, bringing a long-awaited ray of hope to China's solar industry, which had been struggling for nearly two years. At the 5th China (Wuxi) International New Energy Conference in Wuxi, Jiangsu, Xu Xianghua, vice president of the Eleventh Design Institute of Information Industry Electronics, highlighted that since the start of the fourth quarter, there has been a surge in investments in photovoltaic power plants across different regions. This renewed interest has led to a sharp increase in production from domestic PV module manufacturers, signaling a clear recovery in the sector.
With the international market shrinking, the domestic electricity price subsidy policy has become a crucial factor in making the entire photovoltaic industry profitable. According to Xu, the national subsidy rate of 0.42 yuan per kilowatt-hour is significantly higher than what the industry had anticipated. Given the current average cost of around 1 yuan per kWh for solar power generation, this policy is expected to greatly enhance the competitiveness of solar energy.
In addition to the national-level support, local governments such as those in Wuxi, Jiangsu, and Zhejiang have also introduced supplementary subsidies ranging from 0.1 to 0.3 yuan per kWh. This has encouraged even some companies that were previously skeptical about profitability to enter the market. For instance, a recent distributed power plant project in Wuxi New District is projected to achieve profitability within 7 to 8 years.
According to a report by Solarzoom, a leading market research firm, the recent boom in PV projects has led to near-saturation in the capacity utilization of top-tier manufacturers. Many companies have already booked orders through the end of the year, with some locking in contracts for the first quarter of next year. The demand for components in November and December has created noticeable capacity gaps in several manufacturing plants.
"Compared to previous subsidies for PV modules, this new policy will provide support based on actual power generation," Xu explained. "This shift will make investors more focused on project quality, and large-scale domestic PV module traders are likely to benefit first." He added that as technological advancements continue, the potential market for solar power will keep expanding, driving sustained high growth in the industry for the foreseeable future.
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