In today’s technology, solar farm has evolved to be sustainable. As such, many nations have attempted to capitalize on the maturing technology to reduce their reliance on fossil fuels. However, China has championed the solar revolution, surpassing U.S. to be the world’s largest market for both photovoltaics and solar thermal energy. According to international organization international Energy Agency, China is currently the world largest producer of solar panels, accounting for over 60% of the production and 50% of the demand. Over half of the world top ten solar panel manufacturers are now located within China. China is also the world largest solar energy producer, with a solar energy capacity at 130 gigawatts. In sharp contrast, U.S. has a capacity of 60 gigawatts.

Massive Solar Farms

Due to the sheer size of China, solar farms are generally much larger than those found in other countries. For instance, at the Tengger Desert lies the largest solar plant in the world, at a capacity of 1,500 megawatts. The Longyangxia Dam facility at Tibetan Plateau houses a four million panel, 850-megawatt mega solar farm. One can also find a unique solar farm in Datong County. There lies a 100-megawatt farm where the solar panels are positioned into the shape of two pandas to symbolize China’s national treasure.

China’s Solar Subsidies

Under China’s five-year plan, many of the renewable energy industry received subsidies and tax incentives. However, according to a report by Reuters, delays in the disbursement of subsidies have resulted in many projects facing the risk of bankruptcy. Government-backed solar projects are approved to subsidized for each kilowatt-hour sold to the grid in order to reduce the cost of providing solar energy to the region; the solar boom are putting a dent on the government’s budget, resulting in payment delays. According to Reuters, there is currently a backlog of $17.4 billion in subsidies.

In May 2018, the National Development and Reform Commission, the Ministry of Finance and the National Energy Administration issued a joint notice, stating the implementation of new policies to reduce subsidies for the solar industry. Under the new policy, new installation of solar farms for the remaining of 2018 will no longer be eligible for subsidies. Electricity prices from solar farms will also be reduced. For instance, price paid per kilowatt hour for three regions are reduced from 0.90, 0.95 and 1.00 RMB to 0.50, 0.60 and 0.70 respectively.

Without subsidies, it takes approximately seven years for a solar farm to be profitable. The lack of subsidies has already led to the stoppage of some solar projects as investors withdrew their investment due to a lack of return.

Already, provincial governments have been working actively to provide other forms of support (other than financial support) for solar projects, For instance, regulations are laxed and more regions are opened up for solar farms.

The Move From Solar Farms to Solar Buildings

In recent years, there have been a notable transition from the building of mega solar farms to installation of solar panels on buildings. Many of the country’s solar panels are located far from cities that actually need them the most. The long transmission line to connect to urban areas have resulted in power loss. While better transmission line technology are being developed, it is still a work-in-progress and are does not solve the root problem of lack of demand for rural solar farms. As such, a new pattern has emerged: covering skyscrapers with solar panels and selling directly back to the building. Rooftop solar panels are generally more efficient due to the absence of transmission line, though it is subjected to much more conditions such as the height of surrounding buildings, the weather condition in urban areas, as well as size of the project.

The Future of China’s Solar Industry

China’s National Renewable Energy Center currently has a target for 200 gigawatts by 2020 as outlined in the ‘Renewable Energy Roadmap’ in 2017. China is also target to increase non-fossil energy to 20% of its total production by 2030, up from its current 11% of production.

Over the next decade, solar technology is expected to be more efficient in the conversion of solar energy to electrical energy. Cost of producing solar panels is also expected to be cheaper. As such, the fall in solar subsidies may become immaterial as solar projects become more profitable. Increasing demand for energy is expected to exhaust existing supplies of coal, oil and natural gas, according to Liu Zhenya, former chairman of China’s state-owned power company, State Grid Corp. As the world becomes increasingly concerned with the ill-effects of coal production and consequences of climate change, we will see a rise in demand for solar energy and China’s solar industry will undoubtedly experience another wave of solar boom.

This article was posted on: Redpulse

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