In recent research reports, UBS Securities highlighted that the fundamentals of China's photovoltaic industry are set to improve significantly in 2018. A key factor is the continued decline in the cost of solar power generation. By 2020, it's expected that the cost will drop by as much as 33%, reaching 0.35 yuan per kWh—marking a major shift in the energy landscape.
2017 was one of the most dynamic years for China’s solar sector, with the "6·30" rush driving an unprecedented surge in installed capacity. At the 2017 China Photovoltaic Industry Annual Conference, Shi Dingxi from the China Renewable Energy Society confirmed that China's PV installations surpassed 50 GW without any major issues, signaling strong momentum in the sector.
According to data from the National Energy Administration, as of November 2017, new solar capacity reached 48.37 GW, with distributed PV installations hitting 17.23 GW—a 3.7-fold increase compared to the same period in 2016. Cumulative installed capacity reached 125.8 GW, representing a 67% year-on-year growth. This marked a significant rise in the share of solar within China’s total power generation mix.
The growth in solar power generation was largely driven by technological advancements such as high-efficiency monocrystalline cells, advanced battery technologies, and improved panel efficiency, which have pushed solar cell efficiency beyond 20%. As a result, the proportion of solar power in the national grid has steadily increased.
Looking ahead, the 2018 market is expected to benefit from this progress. UBS predicts that global solar demand will reach between 112 GW and 136 GW during 2018–2020, with China alone installing at least 50 GW annually. Leading manufacturers are expected to continue innovating, expanding their market shares, and reinforcing their industry positions.
Industry experts like Zhao Yuwen note that the 2017 surge was largely due to the “6·30†deadline, where companies rushed to connect projects before the end of June to secure higher subsidies. This created a spike in installations, especially in the first half of the year.
Distributed solar also saw remarkable growth in 2017. By November, distributed PV capacity reached 17.23 GW, a threefold increase compared to 2016. Experts predict that this trend will continue into 2018, despite a slight reduction in subsidy rates.
Newly commissioned distributed systems after January 1, 2018, will follow either a "self-use and surplus" model or be connected directly to the grid. The subsidy rate for the "self-use" model was adjusted down to 0.37 yuan per kWh, but the cut was smaller than expected, offering continued support for the sector. Additionally, residential solar poverty alleviation projects will maintain their subsidy rates, encouraging more households to adopt solar energy.
Industry insiders, such as Liao Wei, believe that the policy adjustments won't dampen the growth of distributed solar. Instead, they see it as an opportunity for companies to capture market share and drive further adoption. With ongoing innovation and supportive policies, the future of China’s solar industry looks promising.
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