IEEE Power & Energy Magazine - May/June 2020 - 54

its initial policies in 2011, the National Development and
Reform Commission has launched new policies seven times
that each changed subsidies in the PV feed-in tariff. Every
time a new subsidy policy is launched, it affects the PV
industry significantly, albeit to a varying degree, thus resulting in fluctuations in the capital market. The country's PV
benchmark electricity prices are shown in Figure 4. Region 1
has more than 1,600 annual equivalent-utilization hours.
Region 2 has 1,400-1,600 and Region 3 has 1,200-1,400
annual equivalent-utilization hours.
In 2013, to mitigate the impact of the antidumping and
antibribery investigation of China's PV companies by the
United States and European Union, the national government decided to vigorously support the development of its
domestic PV industry, especially the PV downstream industry. Therefore, after the initiation of the investigation, the
government proposed subsidies for the PV feed-in tariff by
dividing the country into three types of resource regions
drawn according to insolation levels, conditions, and benchmark electricity prices.
After the 2013 subsidy policy for the PV electricity price
had been implemented for more than two years, the PV
industry underwent rapid development because of the subsidies, with a significant growth in newly added PV installed
capacity that constituted more than 50% of the global newly

installed PV capacity and resulted in a rapid reduction in PV
product costs. To promote the development of the PV industry, the government sets the next year's new benchmark electricity price for PV power generation at the end of each year,
with an average annual decline of 1.453-2.18 cents per kilowatt hour. Because governmental support for PV is subject to
annual change, PV power-generation systems are installed as
soon as possible so that higher subsidies can be received in
the early years.
On 31 May 2018, the Nationa l Development a nd
Reform Commission changed the long-established policy
of gradually reducing subsidies at the end of each year
and announced a sudden major decline in PV subsidies.
Despite this reduction, because of quota limits, new PV
power plant projects would not be approved. As a result
of this news, the PV industry immediately experienced a
severe setback, with companies' share prices plummeting. Subsequently, in early 2019, the National Development and Reform Commission issued a notice regarding
the promotion of PV grid parity and proposed a series of
policies in favor of subsidy-free feed-in PV power, signaling the government's intention to further reduce or even
cancel the subsidies.
As shown by the changes in PV installed costs and
the adjustment of electricity prices during the past, the

120

450
425%
Initial
Demonstration
Phase

400

102

Recovery and Rapid
Development Phase

94.3

300

269.64%

80

350

73

250

206.72%
60
166.67%
40
100%

34.54

72.46%

0

42.74%

16.63
10.95

7.26
5.56
2.39
0.21
0.56
0.02
0.04
2007

2008

2009

2.07

2010

2011

3.57
2012
2013
Year

10.6

50

53.62%

15.13
0

-3.2%
2014

150
100

29.7

27.7

20

44.26

128.29%

43

38.4

200

53.06

53

(%)

100

Setback
Phase Resulting
From Antidumping and
Antibribery Investigation

-16.6%
2015

2016

2017

2018

-50

China's New PV Installed Capacity (GW)
Global New PV Installed Capacity (GW)
Growth Rate of China's PV Installed Capacity (%)

figure 3. China's PV installed capacity.
54	

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