Current situation and prospect of photovoltaic power generation in China

Part One: Solar energy resources overview

In 2021, the amount of solar radiation in China is lower than the annual average, and the distribution of solar radiation in China shows a trend of first increasing from northwest to southeast, then decreasing and then increasing. The national average annual horizontal level total radiation exposure in 2021 should be 5,376 megajoules per square meter, which is about 1.7% lower than the average for the past 30 years, that is, from 1991 to 2020. The total auxiliary illumination of the national average photovoltaic power generation optimal slope is also 6295 megajoules per square meter, which is about 1.2% lower than the average value in the past 30 years. According to regional statistics, the total annual level of China in 2021 is also lower than the average of previous years in northern regions, and mainly higher in southern regions. According to the statistics of provincial administrative areas, just like Shanghai, Anhui, Tianjin, Yunnan, Hainan, the annual total amount of water level is close to the average value of previous years; Like Hunan, Guizhou, Jiangxi, Sichuan is larger, like Guangxi, Fujian is significantly larger, like Jilin, Shandong, Hubei, Henan, Shanxi, Zhejiang, Xinjiang, Chongqing, then Xizang, Shaanxi, Jiangsu is smaller, Liaoning, Ningxia, Qinghai, Inner Mongolia, Beijing, Hebei, Heilongjiang, Gansu, is significantly smaller, which is a general situation of solar energy resources.

Part two: The development of photovoltaic power generation

First, the development process

(1) Initial stage of development

From 1978 to around 2005, after the reform and opening up, the state supported photovoltaic application demonstration projects, so that photovoltaic systems were developed in industrial and rural applications, such as small household systems and village power supply systems. After 2000, the state has launched the power plan of the western provinces and regions without electricity boxes, bright project and other projects, so that the photovoltaic power generation system has played an important role in solving the problem of electricity consumption of farmers and herdsmen in remote areas without electricity. According to statistics, as of the end of 2005, China's cumulative installed capacity of photovoltaic power generation is about 70,000 kilowatts.

(2) Industrialization development stage

Probably from 2006 to 2012, we all know that in 2006 China issued the "renewable Energy Law", began to gradually establish a policy environment conducive to the healthy development of photovoltaic power generation industry. Since 2009, China has implemented the Golden Sun demonstration project, photoelectric building application demonstration project; In 2009 and 2010, China has launched two rounds of photovoltaic concession bidding projects, which effectively promoted the development and construction of photovoltaic power generation projects, product research and development and manufacturing.

(3) Stage of large-scale development

Probably from 2013, in order to expand the domestic photovoltaic market, in 2013 The State Council issued a number of opinions on promoting the healthy development of the photovoltaic industry, after this, the ministries and local governments actively issued policy documents to support and regulate the development of the photovoltaic industry, in a series of favorable policies to promote the rapid development of China's photovoltaic power generation market. By the end of 2020, the cumulative installed capacity of photovoltaic power generation has reached 253 million kilowatts, with centralized photovoltaic accounting for about 175 million kilowatts and distributed photovoltaic accounting for about 80 million.

Second, development policy environment

China has formulated a series of policy measures to support the development of the photovoltaic power generation industry, and the continuous implementation and adjustment to promote the development and utilization of photovoltaic power generation has achieved obvious results. In 2021, the industry management method continued to optimize and adjust, in May, the National Energy Administration issued a notice on the development and construction of wind power photovoltaic power generation related matters.

Third, development status

In terms of installed capacity, the new installed capacity of photovoltaic power generation in 2021 reached 54.88 million KWH, a record high, and a year-on-year increase of about 17%. Most of the new installed capacity is parity projects, and the cumulative installed capacity reached 306 million kilowatts by the end of 2021, ranking first in the world in both new and cumulative installed capacity. In terms of operation, the national photovoltaic power generation in 2021 continued to increase, reaching 325.9 billion kilowatts, an increase of about 25%, accounting for 4% of the total power generation, an increase of 0.6 percentage points.

Under the general trend of global energy green low-carbon transformation, foreign trade is also growing rapidly, the total export of photovoltaic products is 28.43 billion US dollars, an increase of about 44%, module exports are about 24.6 billion, the export volume of about 99 plans, exports and exports are a record high. In terms of investment costs, the total investment cost is the overall increase, in 2021 under the guidance of the national carbon peak carbon neutral goal, the social attention of photovoltaic power generation continues to increase, the financial environment has significantly improved, and the overall investment in photovoltaic power generation in China has shown an upward trend. The new investment scale of photovoltaic power generation in 2021 is about 215.7 billion yuan, up 17% year-on-year, of which the new investment of centralized power stations is about 106.2 billion yuan. The new investment in distributed photovoltaic power plants is about 109.5 billion yuan.

As can be seen from this figure, in recent years, China's photovoltaic power plant investment cost is generally a downward trend, 2021 due to the price fluctuations of the industrial chain, system costs and module prices have risen for the first time, the average price of photovoltaic modules is about 1.93 yuan per watt, an increase of 23%, module costs accounted for about 46% of the total investment cost. For example, one of the most important components, the cost of centralized photovoltaic power stations per kilowatt is 4150 yuan, an increase of 4%. The cost of distributed photovoltaic power station per kilowatt is about 3140 yuan, an increase of about 11%.

The third part: the photovoltaic industry is facing the situation and development trend

In the face of the situation, in 2021, driven by the goal of carbon peak carbon neutrality, China's photovoltaic power generation ushered in a major development opportunity period, the scale of new development reached a record high, new projects fully realized affordable Internet access, power generation utilization rate maintained a high level, equipment manufacturing scale and technical level continued to progress.

First, the situation facing the photovoltaic industry:

(a) the national major strategic goals, for the development of the photovoltaic industry to provide broad prospects, is carbon peak carbon neutral proposed, the state has formulated a series of policies, to build a complete policy system. In October 2021, the Central Committee of the Communist Party of China and The State Council issued opinions on the complete, accurate and comprehensive implementation of the new development concept and the work of carbon peak carbon neutrality. The State Council issued a notice on the issuance of the 2030 carbon peak action plan, which is what we said, the National development 23 document, focusing on the construction of carbon peak carbon neutral a policy system, clearly proposed that by 2030 the total installed capacity of wind and solar power generation reached more than 1.2 billion kilowatts, and proposed energy green low-carbon transformation actions. In 2021, the Central Economic Work Conference also proposed that new renewable energy consumption is not included in the total energy consumption control, the country is also formulating new documents in the implementation, with the in-depth promotion of carbon peak carbon neutral goal, we believe that the photovoltaic industry will usher in a longer period of development opportunities.

(2) The coordination mechanism between photovoltaic power generation planning and territorial space, land ecological function protection, and power grid planning needs to be established urgently. After the double carbon goal is proposed, it is required to vigorously develop new energy, but also put forward higher requirements for basic ecological construction goals such as forest storage capacity, and the policy standards for photovoltaic project development and construction land are more stringent. In addition, after 2022, we believe that China's photovoltaic industry will continue to maintain a rapid development trend. Large-scale, high proportion of new energy access to the grid will greatly increase the operation and absorption pressure of the system, the need to coordinate the top-level design level of photovoltaic power generation, territorial space, land ecological function protection, power grid absorption and other development plans, to achieve a multi-regulatory, build a new system, to ensure the better and faster development of the photovoltaic industry.

(3) Photovoltaic power generation is still facing challenges in market trading. At present, new energy such as photovoltaic power generation has gradually participated in electricity market trading through green electricity trading pilot and spot trading. In January this year, the state issued the "Guidance on accelerating the construction of a national unified electricity market system" proposed that by 2030, the national unified electricity market system should be basically completed, clearly saying that new energy fully participate in market trading, with the gradual deepening of the reform of the power system, photovoltaic power generation and other new energy to participate in market trading is definitely the trend of The Times. Photovoltaic power generation has volatility and intermittenity, and compared with traditional power sources with adjustment capabilities, such as thermal power and hydropower, it requires additional self-built (purchased) system peaking resources or directly bears higher credit costs. At the same time, the electricity price of new energy participating in the electricity market will change greatly from the original guarantee purchase, which will also have a great impact on their earnings, and they may face great pressure to participate in market-oriented transactions.

(4) The short-term fluctuation risk of photovoltaic power generation development income. With the gradual release of silicon production capacity in the middle of 2019, the supply of silicon will increase significantly by the second half of 2022, and the mismatch between industrial supply and demand is expected to be alleviated. In addition, many provinces put forward photovoltaic power generation projects that are included in the scale of the guaranteed power grid, and also require a certain proportion of energy storage devices, land costs, non-technical cost financing, and power grid delivery are difficult to effectively reduce in the short term, and photovoltaic project investment income faces short-term volatility risks.

Second, the development trend of photovoltaic industry:

(1) Centralized and distributed simultaneously promote the continuous and rapid growth of photovoltaic installed capacity.

1. Centralized photovoltaic power generation based on a large base becomes the ballast stone. 

2. Distributed photovoltaic power generation will become the growth pole in the central and eastern regions. In June 2021, the National Energy Administration issued the Notice on Submitting the Pilot Program for the development of rooftop distributed PV in the whole County, requiring the integration of resources and the realization of intensive development. From the perspective of the development situation in 2021, among the new installed capacity of photovoltaic power generation in the central and eastern regions, distributed power generation accounts for about 55%. With the new possible renewable energy continues to integrate into the total consumption control policy implementation, the central and eastern regions as a large energy consumption province, considering the land resources shortage and other objective reality, the increase in photovoltaic power generation will be expected to hit a new high.

(2) The development and utilization mode of photovoltaic power generation will continue to diversify.

1. Photovoltaic development will continue to maintain the characteristics of multi-variety collaborative development, and further achieve integrated development with other industries. In terms of the coordinated development of multiple varieties, in addition to photovoltaic plus energy storage, it will continue to increase the coordinated development of multiple varieties such as water landscape, landscape fire storage, and regional coupled heating.

2. In terms of integrated development, new energy such as photovoltaic power generation will continue to deepen the integration of agriculture, forestry, ecological environment, rural revitalization, etc., and continue to expand new fields and new scenarios for the development of new energy.

(3) Photovoltaic power generation technology will accelerate iteration.

1, large size photovoltaic cells will become the mainstream, due to the ability to obtain lower communication costs, in recent years, the single size of crystalline silicon cells continue to develop to large sizes.

In 2022, the market share of batteries with a size above 182 mm is expected to reach more than 70%.

(4) The green environmental value of photovoltaic power generation will be further highlighted.

1. Green certificate is the only proof of the environmental attributes of new energy generation and the consumption of green electricity.

2. Photovoltaic power generation enterprises can obtain environmental benefits by selling green certificates. By the end of 2021, according to our statistics, the cumulative number of green certificates in the country is about 620,000, corresponding to 620 million kilowatts of scenery green power generation. The enterprises participating in the green certificate subscription involved manufacturing, electrical appliances, chemical services and other industries, of which manufacturing accounted for more than 50%. With the in-depth promotion of China's carbon peak carbon neutral goal, the current social green convenience consumption demand gradually increased, will further stimulate the vitality of the green certificate market, the state is also studying the development of a new improve the green certificate system of important documents, with the introduction of a series of policies, photovoltaic new energy green environmental value will be further reflected.