The Rise and Challenges for China's PV Deployment Regulation

• Author: Chen Zhaoxi
• Pages: 130-158

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130 TSINGHUA CHINA LAW REVIEW [Vol. 11:129

THE RISE AND CHALLENGES

FOR CHINA’S PV DEPLOYMENT REGULATION

CHEN Zhaoxi

Abstract

Designated as one of the seven “strategic emerging industries” in China’s 12th Five-Year-

Plan (2011-2015), the solar photovoltaic (PV) industry has become the main focus of China’s

renewable energy policies to combat climate change. A recent drastic regulation change has

seen that the government’s focus on PV deployment methods was shifted from centralized

large-scale PV generation (LSPV) to distributed PV generation (DPV). This research

compares the different regulation tools used by the Chinese government in relation to the

deployment of LSPV and DPV projects and assesses their respective development challenges

as well as regulatory impacts.

I. INTRODUCTION

Designated as one of the seven “strategic emerging industries” in

China’s 12th Five-Year-Plan (2011-2015), the solar photovoltaic

(hereinafter referred to as “PV”) industry has become the main focus

of China’s renewable energy policies to combat climate change. The

Chinese PV deployment market consists of two main types of

application: (1) centralized large-scale PV generation (hereinafter

referred to as “LSPV”), and (2) distributed PV generation

(hereinafter referred to as “DPV”). As defined by China’s National

Energy Administration (hereinafter referred to as “NEA”),

distributed generation is small-scale generation mainly for self-

consumption, located near or at the point where the power is used

(i.e. the opposite of centralized power generation). China’s biggest

grid company, the State Grid has further defined on-grid DPV

generation as PV electric generation that feeds into local distribution

network that is less than 10KV, with an installation capacity less than

6MW.

While LSPV projects are usually connected to high-voltage

transmission grid, on-grid DPV projects are connected to

low/medium-voltage distribution grid. Typical examples of on-grid

DPV projects are building-attached PV (hereinafter referred to as

“BAPV”) projects such as rooftop installation, and building-

integrated PV (hereinafter referred to as “BIPV”) projects such as

installation as a part of building facades.

Although solar is only a small fraction of the renewable energy

sector in China, scholarship on Chinese PV industry is abundant.

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2018] CHINA’S PV DEPLOYMENT REGULATION 131

Nevertheless, the vast majority of literature reviews the lex superior

of policies and administrative measures taken by Chinese

authorities. 1 For example, a succinct summary of China’s

governmental interventions in the PV industry is provided by Zhao et

al. (2011),2 who classified the intervention methods into legislation,

policies, financial incentives, and/or taxation. Other scholars such as

Sun et al. (2014)3 and Liu & Shiroyama (2013) rightly commented

that China’s PV policies focused mainly on the supply side while

ignoring the importance of the consumer demands. Although Liu &

Shiroyama (2013)4 have summarized the PV industry regulations

with respect to three areas: (1) rural electrification; (2) large-scale

PV generation; and (3) small-scale distributed PV generation, few

scholars studied in details the industry chain and focused on the

regulations and policies on the downstream PV deployment sector.

This research therefore intends to fill the void by comparing the

different policy tools used by the Chinese government in relation to

the deployment of LSPV and DPV projects and assessing their

respective regulation impacts as well as their development

challenges.

The observations generated from this research will not only

identify the evolution and milestones of China’s PV deployment

market, but also help to predict future industry trends and potentially

lay the groundwork for further regulation studies of the PV industry

in China. In addition, this research might shed light on other

questions such as whether the maturity of the PV industry reflects

broader energy regulation trends in China; or whether the

1 For example, see Huo Molin & Zhang Danwei, Lessons From Photovoltaic Policies In China for

Future Development, 51 ENERGY POLICY 38, 38-45 (2012); Wang Qiang, Effective Policies for

Renewable Energy – the Example of China’s Wind Power – Lessons for China’s Photovoltaic Power,

14 RENEWABLE & SUSTAINABLE ENERGY REVIEWS 702, 702-712 (2010); Zhang Sufang & He

Yongxiu, Analysis on the Development and Policy of Solar PV Power in China, 21 RENEWABLE &

SUSTAINABLE ENERGY REVIEWS 393, 393-401 (2013); Zhao Ruirui et al., Present Status And Prospects

of Photovoltaic Market in China, 39 ENERGY POLICY 2204, 2204-07 (2011).

2 Zhao Zhenyu, Zhang Shuangying & Zuo Jian, A Critical Analysis of the Photovoltaic Power

Industry in China – From Diamond Model to Gear Model, 15 RENEWABLE & SUSTAINABLE ENERGY

REVIEWS 4963, 4963-71 (2011).

3 Sun Honghang et al., China’s Solar Photovoltaic Industry Development: The Status Quo,

Problems and Approaches, 118 APPLIED ENERGY 221, 221-30 (2014).

4 Liu Dawei & Hideaki Shiroyama, Development of Photovoltaic Power Generation in China: A

Transition Perspective, 25 RENEWABLE & SUSTAINABLE ENERGY REVIEWS 782, 782-92 (2013).