In a Policy Turnaround, China Plans to Increase Solar Target Up to 270 GW by 2022

To date, The country has installed 165 GW of solar


After announcing installation caps in the second quarter, China is expected to be currently evaluating the feasibility of increasing its solar installation target to 250-270 GW by 2022. China currently has installed 165 GW to date.

In June, China’s National Development and Reform Commission (NDRC), the Ministry of Finance and the National Energy Administration (NEA) jointly released a notice, imposing installation caps and reduced the feed-in tariff (FiT) for solar projects in the country. The government notice specified that a cap of 10 GW would be imposed on the DG projects for the year 2018. The government notice also stated that the utility-scale target for the year would be abolished, and all regional provinces instructed to impose bans on all entities seeking FiTs under the 2018 mechanisms.

According to a report published by China Securities Network, China’s National Energy Administration recently organized a symposium for the mid-term evaluation of the 13th Five-Year Plan for solar development in China. The meeting emphasized that solar PV is still the key clean energy favored by the state, and will receive more government support in the future. “The state will continue to provide subsidies by 2022, and the relevant policies of the photovoltaic industry will be accelerated in 2019,” the report states.

At the symposium, the parties agreed that the previous plan’s target has been exceeded and even a 210 GW target is not enough. The adjusted target of the 13th Five-Year Plan is expected to be in the range of 250 GW to 270 GW. If the target is revised to the range of 250-270 GW, it would mean an installation rate of 40-50 GW over the next two years respectively.

Chinese government officials at the symposium also concluded that the Energy Bureau will guarantee a certain annual subsidy for the planned installed capacity for at least the next three years, though the subsidy will step down over time.

In October 2018, it was reported that China added 34.5 GW of solar capacity in the first three quarters of 2018, taking China’s total installed solar PV capacity to 165 GW. China’s solar installations have dropped 20 percent when compared to the 43 GW installed in the first three quarters of 2017. This slowdown was expected following China’s policy change to reduce solar installations due to a massive subsidy backlog.

The Asia Europe Clean Energy (Solar) Advisory (AECEA) forecast had lowered China’s solar capacity addition for 2018 from 40-45 GW to 30-35 GW. Other analysts such as Wood Mackenzie/GTM Research, Roth and Daiwa Capital had also reduced their 2018 forecast to 28-35 GW range.

Policy changes in China affects the entire global supply chain and it is still early to predict what this will mean to component prices going forward.