China added 34.5 GW of solar PV capacity in the first three quarters of 2018. This takes China’s total installed solar PV capacity to 164.74 GW, of which 117.9 GW are of utility-scale PV power projects with the remaining 46.8 GW coming from distributed generation (DG) projects, according to the data provided by China’s National Energy Administration (NEA).
China’s solar installations dropped 20 percent compared to the 43 GW installed in the first three quarters of 2017. The installation slowdown was expected following China’s policy change to reduce solar installations following a massive subsidy backlog. Full year 2018 installations will most likely hover at 40GW due to the subsidy cap. According to The Asia Europe Clean Energy (Solar) Advisory (AECEA), outstanding FiT payments at the end of 2017 had risen to approximately $17.5 billion.
There was a 37 percent year-over-year (YoY) increase in the large-scale project installations, which accounted for 17.4 GW, approximately half of the total installations in first three quarters of 2018.
Mercom reported that during the first half of 2018, China’s utility-scale capacity declined by 30 percent YoY with a total installation of 12.06 GW.
There was a 12 percent YoY increase in the DG installations, which accounted for 17.14 GW by the end of September. Approximately 5 GW of DG projects were added in the third quarter of 2018 even after the government said a cap of 10 GW would be imposed on DG projects for the year 2018.
The AECEA forecast has lowered China’s solar capacity addition for 2018 from 40-45 GW to 30-35 GW. Other analysts like Wood Mackenzie/GTM Research, Roth and Daiwa Capital have reduced their 2018 forecast to 28-35 GW. With the installation of roughly 10 GW in the third quarter, China has already reached the 35 GW mark, making these predictions inaccurate.
The 34.5 GW of installed solar in the first three quarters of 2018 is more than the total cumulative solar installation of 25 GW in India. In 2017, China was the largest solar market in the world with 53 GW of solar installed.
In June, China’s National Development and Reform Commission (NDRC) imposed a cap of 10 GW on DG projects for the year 2018. According to the latest numbers, DG installation has already reached 17.14 GW by the end of September and most probably will cross 20 GW by the end of the year, more than double of the cap imposed on it.
The Chinese government has made number of changes to its solar policy. It mandated that only DG projects that have been gird-connected by May 31, 2018 were eligible for feed-in tariffs (FiTs). This was necessitated a massive 360 percent increase in DG installations year-over-year.
The government has also asked states to eliminate the utility-scale target for the year, and all regional provinces have been instructed to impose a ban on all entities seeking FiTs under the 2018 mechanisms.
These changes, made effective as of May 2018, were expected to halt the growth in solar PV installations in the second half of 2018.
Better than expected installations in China could mean a slightly better module demand/supply situation globally, even though oversupply and declining module prices continue to be a challenge.
India has also imposed a 25 percent safeguard duty on imported solar panels from China and Malaysia, effective July 30, 2018.
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