• China has finally selected around 26 GW of new solar PV capacity to secure state support in 2020, as per Bloomberg
  • This comprises large scale as well as industrial and commercial projects in the form of 434 projects
  • Projects must be grid connected to claim subsidies failing which such projects will be struck off the list

The Chinese National Energy Administration (NEA) has selected close to 26 GW of solar power capacity to dole out the subsidy amount for the year 2020. The agency chose 434 PV projects for the purpose, comprising 25.6 GW of utility scale solar, according to Bloomberg.

These projects are located in 15 regions of the country and also include industrial and commercial projects. The report claims this is an increase over 23 GW project capacity approved last year.

Selected projects are obligated to come online by the end of this year. Those that miss their deadline by 2 additional quarters will not get any subsidy benefit. At the same time, their power price will slash by RMB 0.01 ($0.0014) per kWh for every quarter they miss to meet the deadline. This could trigger strong demand in the second half of 2020.

However, it is not clear if the entire subsidy amount has been claimed by the selected projects. In March 2020, NEA confirmed RMB 1.5 billion as 2020 subsidy budget for new large scale and rooftop solar projects, bringing it down from RMB 3 billion allocated in 2019 to nudge the local solar market towards a subsidy free development environment.

Several projects from last year’s July auction were not finished until the end of 2019, resulting in strong demand in the later part of Q2/2020, as they had to be installed by the end of June.

Local media reports suggested that 22 Chinese provinces had submitted a list of 4,168 solar PV projects representing 33.59 GW cumulative capacity for state subsidies with lists due from other provinces (see Chinese Provinces Acting Fast On Subsidy PV Projects).

In 2020, China is expected to add between 32 GW to 45 GW of solar power capacity by various market and industry experts, including the China Photovoltaic Industry Association (CPIA). This would be higher than the disappointing 30.1 GW China installed in 2019, a 32% YoY decrease on the 44.4 GW it added in 2018. SolarPower Europe’s June published Global Market Outlook 2020-2024 forecasted in its Medium Scenario a newly installed capacity of 39.3 GW in 2020.