China Will Have Solar Feed-in Tariff in Place in 2009 - Suntech

August 21, 2009 | 7 Comments

The Chinese government is readying a feed-in tariff (FIT) for utility-scale solar plants that will dwarf the country's previous solar subsidies, and drive a wave of investment into the sector, according to Suntech.

The FIT will likely fall between 1.09 yuan and 1.5 yuan (US $0.16-0.22) per kWh of electricity produced at large-scale photovoltaic (PV) arrays, and will be in place by the end of the year, predicts Suntech chairman Zhengrong Shi.

Comparing the likely shape of the FIT to China's existing roof-top subsidy and 'Golden Sun' programme, which focuses on remote off-grid installations, Shi says: "This new type of solar policy will drive much faster growth in the Chinese solar market."

Along with a bevy of competitors, Suntech, the world's largest maker of crystalline solar modules, is scrambling to put the right pieces in place to take advantage of the FIT if and when it comes.

Chief executive Shi says that even China's existing solar subsidies — the rooftop scheme, the Golden Sun programme, and another announced earlier this year that will see a suite of large-scale arrays erected in Jiangsu province — are causing a buzz within the Chinese solar industry.

"While we're still awaiting clarification on some of the policy details, these programmes are generating a significant amount of interest in the domestic Chinese solar market, and have the potential to drive the market up by at least 100 MW to 200 MW per year," he says.

This article was reprinted with permission from Power Engineering as part of the PennWell Corporation Renewable Energy World Network and may not be reproduced without express written permission from the publisher.

7 Comments

Mary Saunders
August 26, 2009

Government represents some people, not the people, unfortunately. Cronies leverage small payments to officials to leverage huge subsidies back. It is unclear how long this organized corruption can be maintained by the present cast of characters. In the meantime, Main Street must figure out how to get things done as huge amounts of debt are pumped offshore. Meanwhile value, in the form of working engines, is destroyed. I watched a video where a new-appearing Volvo engine was burnt up to comply with Cash for Clunkers fine print. Fortunately, those of us out in the hinterlands mostly don't depend on D.C. to feed us or anything like that.

ANONYMOUS
August 26, 2009

Robert Kennedy Jr. once said, "The threat of big government is dwarfed by the threat of corporate power." Government mandated feed-in tariffs in the U.S. would go far to energize the fledgling renewable industries. It is the corporate and quasi-corporate utililties and fossil fuel people we have to fear - No one elects them, no one is trying to stop them from getting even bigger and stronger, and no one can remove them. That's why government has to step in, as with the banks that failed. Government represents the people; corporations represent profit-making and don't care about climate change or doing the right thing for its own sake.

Mike Holly
August 24, 2009

Steven:
Controlled economies do not have market prices. A market is defined as a place where goods are offered for sale. Regulated utility monopolies have captive ratepayers who must pay cost plus profit as approved by regulators.

Moreover, you need to study the utility competitive bidding process in US states. There is no requirement that utilities must select the lowest-cost bids. Often bidding even mandates windpower.

Windpower is likely the least competitive renewable energy, even compared to solar. The July 2009 issue of Power Engineering demonstrates that windpower increases generation costs by more than twice while reducing greenhouse gases by a mere 11 percent (because it must be inefficiently backed up by natural gas).

Meanwhile, utility monopolies are blocking small-hydro, geothermal and biomass sources, which could reduce by nearly 100 precent the far greater greenhouse gases from base-load coal plants at very low cost. You should take another look at the potential of small-hydro and even geothermal.

Sugar cane biomass energy plants in Brazil can reduce CO2 by 90% at virtually no cost. Our company could offer a similarly low cost technology, but we are not prepared to even talk about here until the US de-monopolizes the electricity industry.

ANONYMOUS
August 23, 2009

Mike:
Even in highly regulated and imperfect markets there is a market price and the European FITs that many point to as "successful" pay quite a bit more than this price for specific favored technologies. The China FIT is also going to pay much more for solar than for coal.

25 states in the US have negligible (<100 MW) wind development and many (the entire southeast) have very poor wind resources. Other technologies should have an easy time competing against wind in these states. Wind, which still only accounts for about 2% of electricity production, has achieved its market share largely by being cheaper than other renewable technologies. Small hydro has very limited potential and geothermal is currently exploitable only in a few locations (although new techniques may eventually change this). As for biomass, perhaps you would like to hint at a biomass technology that is better than wind for the electricity generation sector....
Steven

Mike Holly
August 21, 2009

Steven, or perhaps China wants to develop a renewable industry besides just windpower. The US essentially mandates mainly only windpower while allowing utility monopolies to block other lower-cost and more reliable renewable energies like small-hydro, geothermal and biomass that could replace base-load coal and nuclear plants.

Your statement "I see no reason why we would want to guarantee producers above market rates for decades" makes no sense. First, I don't know what you mean by a market price since there are no competitive free markets in the US electricity industry. Second, feed-in tariffs can be set at any level the government wants, including at a lower cost than coal and nuclear plants.

ANONYMOUS
August 21, 2009

Mike, (regarding your question in comment #1):
Perhaps communist China still retains a stronger penchant for state control of the economy that the US has. I see no reason why we would want to guarantee producers above market rates for decades....

Here is a prediction: China's FIT will be small in overall capacity added, limited to solar PV from Chinese vendors, and designed mainly to stem the tide of red ink in their PV industry, which has recently ramped up capacity so fast that there is now a glut on the market. This is likely less about clean energy than it is about supporting an industry they believe will be a key exporter in future years--especially if lots of other nations follow with FITs of their own.
Steven

Mike Holly
August 21, 2009

Why can't Obama pass a national feed-in tarriff? The US utility monopoly industry is more entrenched than China.