21 February 2020

Firms fail to see bright future in on-site solar projects

China wants to step up its solar energy program by offering subsidies for distributed solar projects, which carry the advantage of being close to electricity consumers and requiring less infrastructure support for transmission. But industry players are not too enthusiastic about the idea.

Last November the National Energy Administration announced that it aims to install 8 gigawatts of distributed solar projects this year, accounting for two-thirds of the new photovoltaic capacity target for the period.

However, the Ministry of Industry and Information Technology has issued a report saying that only 75 percent of the target, or 6 gigawatts, could be achieved.

Industry veteran Samuel Yang Huaijin {楊懷進}, president and chief executive of Hareon Solar (600401.CN), seems to be even less positive.

Compared with running large-scale solar farms, a big portfolio of small on-site projects could prove to be far more complicated and troublesome.

First of all, Yang told the China Economic Information magazine, the government has to persuade factories and companies to install panels on the rooftops of their buildings.

For most factory owners, electricity cost is not the most important issue in their business. “Enterprises don’t care so much if they could lower the tariffs or not, as long as the firms are productive,” says Yang.

Then there’s the question of whether the buildings, particularly the roofs, are structurally strong enough to handle the weight of the solar panels, he notes.

Photovoltaic companies also complain to mainland media that factory operators usually are not the owners of the premises housing their assembly lines. So it’s time-consuming for solar firms to convince and liaise with multiple parties before they can begin installation works.

These problems are not insurmountable. Yang, for one, believes distributed solar power is the future of the industry, citing the case of Europe, where rooftop projects have proliferated across the region through the years given the limited land available for large solar farms.

For the concept to gain currency in China, Yang suggests that the central government set specific carbon emission reduction targets as a way to induce energy users and building owners to invest in distributed solar facilities on their rooftops.

– Contact the writer at [email protected]



EJ Insight writer