L R AS Published on Friday 30 September 2016 - n° 162 - Categories:China

A significant reduction in purchasing tariffs in China is envisaged for 2017.

The Chinese Energy Administration has announced a proposed feed-in tariff for 2017 for ground power plants and distributed facilities.
For ground power plants, it envisages a price reduction of 23% to 37%. The rate for Region 1 would drop from RMB 0.80 to RMB 0.55 ($0.0825), a decrease of 37%. Region 1 is located in the north-west, most of the north and the autonomous region of Inner Mongolia.

Region 2 would return from 0.88 RMB to 0.65 RMB ($0.095), a drop of 25%. Region 2 is to the west, south-west and north-east, and the rest of the northern region and Inner Mongolia; i.e. Beijing, Tianjin and some districts of Qinghai, Xinjiang and Gansu.
Region 3 would fall from 0.98 RMB to 0.75 RMB ($0.1125), a drop of 23%. Region 3 covers the rest of the country
For distributed facilities that were remunerated at 0.42 RMB/kWh, in Region 1, the tariff would fall to 0.20 RMB ($0.030), a drop of 52%; in Region 2, to 0.25 RMB ($0.0375), a drop of 40%; in Region 3, to 0.30 RMB ($0.0450), a drop of 28%.
If this information is confirmed, the magnitude of these declines would affect internal project performance (return on investment), the size of facilities, and the volume of demand through the supply chain.
The sharp decline in distributed installations is surprising, as it was previously thought that this category was favoured over power plants, which are penalised by grid access restrictions in several regions.
PV Tech of 29 September 2016
Editor's note The difference in prices according to the regions is a good way of directing installations more towards region 3 rather than region 1. Moreover, the evolution of the prices of multi-silicon wafers and cells having fallen by 40 to 44% since the beginning of the year (cf Regard sur le PV n° 161 of 27 September), the price of panels should follow: on this side, the fall is not excessive. The scale of the installations in thefirst half of the year indicated an overly favourable situation, hence pressure on the cost of projects excluding the purchase of panels.

One possible reason for the sharp drop in tariffs in China is that the prices obtained at foreign auctions are much lower than the Chinese purchase price. Another is that this tariff was so interesting in thefirst half of 2016 that a multitude of projects were carried out. The planned reduction is therefore due to an adjustment to restrict installations.
SolarServer of 29 September.

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