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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.
"This new type of solar policy will drive much faster growth in the Chinese solar market."
-- Zhengrong Shi, Chairman, 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.
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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
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.
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
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.
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