“The feed-in tariff is still important as a driver,” Lewis said, “but there are other government policies and incentives that are continuing to drive the rapid pace” of wind power development in China.
China FIT
“The central government’s intention is obvious, future installations shall take place in provinces across East China, preferably in the form of distributed generation,” China-based analyst Frank Haugwitz said in a briefing document circulated earlier this week.
China’s National Development and Reform Commission (NDRC) in October 2015 announced tentative PV feed-in tariffs for 2016, which will be 2-5.88% lower than this year’s level. But it now plans to cut the rates by 2-11.11%, according to China-based media reports.
While this could be interpreted as a negative, reductions of 3% are unlikely to outpace falling equipment (BOS) costs and reductions in the cost of capital for projects.
“By implementing a feed-in tariff scheme, people would be motivated to install solar PV panels as the installation costs can be compensated by the tariff, or even make profit from it.”
However, policies and economic incentives are required. Many governments, such as those in Britain, the US, Japan and mainland China have devised policies to encourage distributed generation. One is based on feed-in tariffs, which have been largely developed from the German model.
Allowing projects located in abandoned land, ponds, lakes, etc. with <20MW of size, grid connection at <35kV, and electricity generated to be consumed locally to receive the feed-in-tariff.
China’s power grids will pay 0.75-0.85 yuan ($0.12-0.14) per kilowatt-hour for electricity produced by offshore wind turbines, the country’s state planning agency said on Thursday in a bid to encourage more investment in the sector.
Last year, China installed a total of about 12 gigawatts (GW) of new solar capacity, up from just about 3 GW in 2012, making it the worlds largest solar market by far. . . At present, the country offers a feed-in-tariff for both utility-scale power plants as well as distributed generation installations.
A CNY 1 (16 US cents) per kWh feed-in tariff for large PV projects connecting to the transmission grid ended on 1 January, creating the year-end rush. China’s National Energy Administration announced earlier this month that there were 12GW of 2013 installations, but this preliminary estimate may be exceeded.
