China’s solar utility developers make hay while the sun shines
A new report from solar industry analyst firm Solarbuzz says non-residential solar photovoltaic (PV) projects greater that 50-kW peak that are installed, being installed or under development in China rose to 16-GW in October – a 2-GW jump on the estimated total at the end of September.
According to the latest Solarbuzz China Deal Tracker report 195 projects totaling over 1.8-GW peak will have been installed in China within 2011, bringing the country's solar PV generating capacity close to that of US by the end of this year. This is in line with estimates from the National Development and Reform Commission's Energy Research Institute earlier this year.
To put this in perspective, when China's 12th 5-Year Plan was signed off in March the official target was to have 5-GW of solar power installed by 2015 and this was revised upward to 10-GW just two months later. So the capacity of utility solar PV currently in existence or under development in China already exceeds the official five-year target for all solar by 60 percent.
In an exclusive interview last week with CleanBiz Asia Jiang Kejun, a research professor at the Energy Research Institute, said new projections by the think-tank of having 50-GW of installed solar capacity by 2020 looked achievable. If China's solar PV project pipeline continues to fill at the current rate then that figure may also prove to be conservative.
According to SolarBuzz this year's dramatic fall in solar module and balance-of system prices has significantly improved PV project internal rates of return, leading to an explosion in project development activitiy in China.
“China’s FIT rates – 1.15 CNY/kWh in 2011 and 1.0 CNY/kWh for 2012 – used to be considered so low that project development activities have been mostly limited to high solar radiation regions such as Golmud,” said Solarbuzz analyst Ray Lian. “However, system prices fell so fast in 2011 that project profitability has been improved to reasonable levels in other locations.”
Blubbing in the west
Qinghia, one of China's sunniest province, is the most favored location for solar PV projects, accounting for 26 percent of the country's project pipeline. Neighboring Gansu Province and the Nigxia Autonomous Region account for a further 33, giving China's impoverished northwest almost 60 percent off all planned capacity.
The Qinghai 930 program, quietly launched in May with the objective of having 300 MW of solar PV capacity installed by the end of September at the Golmud solar park, has proven to be particularly attractive to developers.