In recent research reports from UBS Securities, it's highlighted that the fundamentals of China's photovoltaic industry are expected to strengthen further in 2018. A key focus is on the continued decline in the cost of solar power generation. By 2020, this cost is projected to drop by 33%, reaching as low as 0.35 yuan per kWh. This shift signals a promising future for renewable energy in China.
The year 2017 was marked as one of the most dynamic in China’s solar sector, especially with the “6·30†rush in the first half of the year, which significantly boosted the country’s installed photovoltaic capacity. At the 2017 China Photovoltaic Industry Annual Conference, Shi Dingxi, president of the China Renewable Energy Society, noted that China's PV installation surpassed 50 GW without any major issues, marking a significant milestone.
According to data released by the National Energy Administration, by the end of November 2017, China had added 48.37 GW of new photovoltaic capacity, with distributed systems contributing 17.23 GW—nearly 3.7 times the same period in 2016. The cumulative installed capacity reached 125.8 GW, reflecting a 67% year-on-year increase. This growth underscores the rapid expansion of the solar market in China.
Despite these impressive figures, 48 GW wasn’t the total for 2017. Shi Dingxiang confirmed at the conference that the annual installed capacity exceeded 50 GW, demonstrating strong momentum in the sector.
In 2017, China's photovoltaic power generation surpassed 100 billion kWh for the first time, with output from January to November reaching 106.9 billion kWh—a 72% increase compared to the previous year. This growth was driven by advancements in high-efficiency technologies such as single-crystal silicon and improved solar cell efficiency, which now exceeds 20%.
Looking ahead, the impact of 2017's over 50 GW of installed capacity on the 2018 market is significant. UBS predicts that the industry's fundamentals will continue to improve, with further cost reductions and global demand expected to reach between 112 GW and 136 GW by 2020. China's annual installations are likely to remain above 50 GW, with leading manufacturers focusing on innovation and market expansion.
Industry expert Zhao Yuwen explained that the 2017 surge was largely due to the "6·30" deadline, where companies rushed to install before the subsidy cut-off. This created a spike in installations and set the stage for continued growth.
Distributed photovoltaics also saw a significant rise in 2017, with 17.23 GW of new capacity added by November—up 3.7 times compared to 2016. Experts predict that even with adjusted subsidies, the distributed market will continue to expand, particularly for household and poverty alleviation projects, which maintain their subsidy rates.
Liao Wei, an industry insider, emphasized that despite lower subsidies, the policy adjustments are still favorable for the distributed market. With no major cuts in residential electricity subsidies, many companies are well-positioned to capture market share in 2018.
As the solar industry continues to evolve, the combination of technological progress, policy support, and growing demand ensures a bright future for photovoltaics in China.
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