At present, the biggest risk of investment returns for photovoltaic power plants is the decline in electricity prices.
With the soaring installed capacity of wind power and photovoltaic power and a high proportion of access to the power grid, the problem of consumption has become more and more urgent, and the entry of new energy into the market to participate in market-oriented transactions has accelerated. Over the past 15 years, from 4 yuan/kWh to parity and low price, the mainland PV electricity price has undergone several rounds of reform.
Tracing back to history, the large-scale application of photovoltaic terminals in mainland China first started at the beginning of the 21st century, but at that time, most of them were government-led demonstration projects, such as the construction of non-electric counties in Tibet and China's photovoltaic projects, until 2008, when the construction of commercial photovoltaic power stations in mainland China kicked off.
In 2008, the National Development and Reform Commission (NDRC) approved four photovoltaic projects in batches, including two in Shanghai, one in Inner Mongolia and one in Ningxia, and approved the electricity price at 4 yuan/kWh in order to promote the development of domestic industries and give full play to the advantages of solar energy resources in the western region.
In order to further stimulate the mainland photovoltaic terminal market, since 2008, the state has organized and implemented two batches of concession bidding for photovoltaic projects, using low-price bidding. The Dunhuang 10MW PV power plant was launched as the first concession project at the end of '08, and CGN finally won the bid at a price of 1.09 yuan/kWh, and at the same time, the National Energy Administration also agreed that SDIC Huajing Power Holdings would bid for another 10 MW project at the same price.
In June 2011, the second batch of photovoltaic concession projects launched bidding, involving 13 projects in 8 provinces and regions in the west, with a total scale of 280MW, and the winning electricity price range was 0.7288~0.9907 yuan/kWh, which was divided by central enterprises such as the State Power Investment Corporation.
Tender results of the second batch of PV concessions:
At the same time, in 2009, the state began to implement the Golden Sun Demonstration Project, as well as the corresponding financial subsidy support for photovoltaic buildings, which is of great significance to promote the application of photovoltaic in the mainland. However, due to policy loopholes, lack of supervision and other problems, there were a large number of fraudulent subsidies in the market, and the two subsidies were terminated and cancelled in 2013 and 2015 respectively.
In 2011, in order to explore the reasonable feed-in tariff for photovoltaics, the mainland introduced the first feed-in tariff policy for ground-mounted photovoltaic power plants, officially entering the benchmark feed-in tariff period. Policy requirements: PV projects approved before July 1, 2012, put into operation before December 31, 2012, and have not yet been approved for electricity prices, the feed-in tariff is unified at 1.15 yuan/kWh; power stations approved before July 1, 2011 but not completed by the end of the year, except for Tibet, will still be implemented at 1.15 yuan/kWh, and the rest will be implemented at 1 yuan/kWh, and the term will be 20 years in principle.
In order to promote the balanced development of new energy in various regions and improve the efficiency of additional capital subsidies for electricity prices, the mainland began to implement three types of benchmark electricity prices in 2014. The state has made it clear that the project that will be connected to the grid before September 1, 2013 will continue to implement the electricity price of 1 yuan/kWh, and if it is connected to the grid after January 1, 2014, it will be divided into three types of solar resource areas according to the annual equivalent utilization hours of the area, and the regional benchmark feed-in tariff will be implemented.
Since then, the photovoltaic feed-in tariff in the three types of solar energy resource areas has been decreasing year by year. In 2018, it was lowered 2 times, which was the "531" event that made the industry feel uplifted. In addition to the reduction in electricity prices, it also stipulates that only 10GW of distributed PV will be arranged in 2018, and the cut-off point will be advanced to May 31.
It is worth noting that in 2013, the distributed photovoltaic subsidy officially appeared on the historical stage, but in the following 2013~2018, the distributed photovoltaic subsidy dropped from the initial 0.42 yuan to 0.32 yuan, and it was also reduced twice in 2018.
In the aftermath of the earthquake, the mainland PV industry underwent management changes. In 2019, the National Development and Reform Commission changed the benchmark electricity price of centralized photovoltaic power stations to the guide price, and determined the on-grid guide price of the three types of resource areas included in the scope of financial subsidies to 0.40 yuan, 0.45 yuan and 0.55 yuan per kilowatt hour.
Thereafter, in addition to poverty alleviation and household photovoltaics, the rest of the photovoltaic projects to be subsidized must in principle adopt competitive allocation methods such as bidding, with the feed-in tariff as the main competitive condition, and the state will determine the subsidy list according to the subsidy amount by ranking. It is reported that in 2019, a total of 2.25 billion yuan of bidding project subsidies were awarded, and 3,921 projects entered the subsidy list, with a total scale of 22.79GW and a minimum feed-in tariff of 0.2795 yuan/kWh.
In 2020, the centralized photovoltaic feed-in tariff also needs to be confirmed through market competition, and the on-grid guidance tariff for the three types of resource areas will be lowered to 0.35 yuan, 0.4 yuan, and 0.49 yuan per kilowatt hour. The total subsidy that year was 1 billion yuan, and finally 434 projects entered the subsidy list, with a total scale of 25.97GW and a minimum electricity price of 0.2427 yuan/kWh.
In terms of subsidies, after 2019, the state will significantly reduce the distributed subsidies, and divide them into two categories: self-generated distributed and household photovoltaics, which are 0.1 yuan and 0.18 yuan per kWh, respectively, and in 2020, the two subsidies will be reduced to 0.05 yuan and 0.08 yuan per kWh, respectively.
2013~2020 PV feed-in tariff list:
In 2021, the era of parity has arrived. The National Development and Reform Commission (NDRC) has clarified that new PV projects will be implemented according to the local benchmark price for coal-fired power generation, and the central government will no longer subsidize them, but residential PV power plants will only retain a subsidy of 0.03 yuan per kWh for full power generation in 2021.
In addition, the notice also allows new projects to directly participate in market-based transactions and form feed-in tariffs to fully reflect the green power value of new energy. The electricity price of new projects shall be based on the guaranteed hours as the demarcation point, and shall be implemented according to different electricity prices.
2021 Feed-in Tariff Policy:
In 2022, the feed-in parity policy will be continued, and the feed-in tariff will be implemented according to the local benchmark price for coal-fired power generation. With the end of subsidies for household photovoltaic and solar thermal demonstration projects in 2022, it also announced that China's new energy development has fully entered the era of subsidy-free parity.
With the rapid development of new energy sources such as wind and solar, the pace of entering the power market has also been shortened. According to the latest data from the National Energy Administration, as of the end of November 2023, the total installed capacity of renewable energy in the mainland, with solar energy and wind power as the main force, reached 1.45 billion kilowatts, historically surpassing the installed capacity of thermal power and becoming the largest power source in the mainland.
Since the launch of the new round of electricity reform in 2015, the construction of the mainland electricity spot market has made steady progress. In order to accelerate the construction of electricity marketization and promote the consumption of new energy, the National Development and Reform Commission has selected two batches of pilot provinces for spot market transactions.
The electricity spot market is a key step to improve market-oriented transactions, at present, the first batch of 8 pilot areas, Shanxi, Guangdong electricity spot market has been transferred to formal operation, the second batch of 6 power spot pilot areas have all started the simulation operation stage, the future spot electricity proportion or will be gradually increased with the increase in the proportion of new energy.
In recent years, "participation in market-oriented transactions" has frequently appeared in many national and local policies. According to the national plan, the national unified electricity market will be basically completed in 2030, which is also the time node for new energy to fully participate in market transactions. Recently, the policy of the National Energy Administration has clarified that the key energy tasks in 2024 include: gradually expanding the proportion of new energy market-based transactions, and realizing the coordinated promotion of new energy development and market construction.
Participation in market-oriented trading has become an inevitable trend, but due to the concentration of photovoltaic output periods, inbound transactions may face the risk of declining actual transaction electricity prices. Judging from the current trading situation in various power spot pilot areas, there are differences in PV feed-in tariffs in different regions, and the fluctuation range is large, and the income of electricity prices is greatly discounted.
In the latest new energy electricity price policies announced by the four provinces of Gansu, Yunnan, Henan and Guangxi, it can be found that the photovoltaic feed-in tariff is expected to drop by at least 0.025 yuan/kWh and the highest by more than 0.15 yuan/kWh compared with the benchmark price of coal power.
The latest electricity price policy for new energy in the four provinces: