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Residential Solar PV Systems Experiencing Slow Adoption in China

China launched a series of policies at end of 2012 to encourage the deployment of residential solar photovoltaic (PV) systems that can generate sufficient power for one household. In the few months after the roll out of these policies, thousands of interested individuals contacted the State Grid Corporation of China to get more information about this novel form of power supply.

However, as of May 17 of this year, only 25 home PV power stations are in the process of installation across Jiangsu province, with a total installed capacity of 154.7 kW.

Several obstacles hobble the effort:

Roof Space: According to regulations, the purchaser needs to obtain permission of his or her neighbors and of the owners committee of the residential community before installing a home PV power station on the roof. This permission has proven difficult to obtain.

Purchase and Installation of PV Equipment: Residents who want to install their own PV systems must purchase and install the equipment. This is proving impractical as the installation process is complex. In addition, few equipment providers are willing to sell and install such systems for individuals, as the small number of interested home owners and apartment dwellers are scattered across the country and field conditions at each installation site widely differ.

ROI Difficulty: Return on investment is the greatest concern of individuals considering a resdiential solar system. Most potential consumers gave up after learning how long it will take to recover the cost. Generally speaking, a 3-kW system costs 45,000 yuan (approx. US$7,500), and is able to generate 3,600 kWh of power a year. Based on the current electricity price of approximately 0.5 yuan (roughly US$0.08) per kWh in China, it will take more than 20 years to recover the cost, and the lifetime of a photovoltaic panel runs approximately 25 years.

No Policy Support: As an emerging power source, residential PV will need policy support from the Chinese government. The experience in other countries suggests that fast development of the novel power source will rely on high subsidies and supportive policies from the government. Denmark, a country with one of the highest levels of efficiency in energy utilization, requires as part of its Electric Power Law that power utilities give priority to purchasing electricity generated by renewable energy-based power generation organizations, and that consumers have the duty to give priority to using power generated from renewable energy.

The Chinese government encourages and promotes adoption of home PV power systems, and is trying to find a way to address these challenges. As an example, it has supported the development of a plug-and-play PV power generation device that can be easily installed on a balcony or attached to a window.

The Chinese government, however, has not yet developed a specific subsidy policy for home power stations. Sources have revealed that the country’s National Development and Reform Commission has reached a preliminary consensus on subsidies at different levels to distributed PV power generation systems (including residential), in an effort to drive energy conservation and emission reduction.

Lead image: Solar rooftop via Shutterstock

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