IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v65y2020ics0301420719304635.html
   My bibliography  Save this article

What is the future policy for photovoltaic power applications in China? Lessons from the past

Author

Listed:
  • Zhou, Dequn
  • Chong, Zhaotian
  • Wang, Qunwei

Abstract

Over the past decades, a series of policies and regulations have been formulated to encourage photovoltaic (PV) development in China. The phenomena of “subsidy deception” and “PV power curtailment and brownout” indicate the policies have encountered problems in implementation. A large gap between subsidies and renewable funds has compelled the Chinese government to gradually withdraw subsidy policy. As such, investors are focusing on assessing China's future policies for PV application. To determine the reasons for the implementation problems and to seek solutions, this study summarized existing PV power application policies and established a two-dimensional framework to analyze these policies, using a content analysis. We found the government relies too much on the state's macroeconomic control, and does not fully play the role of “invisible hand” in PV power applications. Supply-type and environment-type policies are widely used, making up almost 80% of the total. To fully enable the market's role, it is necessary to reinforce demand-type policies and improve green certification transactions. These are forms of incentive policies instead of subsidies.

Suggested Citation

  • Zhou, Dequn & Chong, Zhaotian & Wang, Qunwei, 2020. "What is the future policy for photovoltaic power applications in China? Lessons from the past," Resources Policy, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:jrpoli:v:65:y:2020:i:c:s0301420719304635
    DOI: 10.1016/j.resourpol.2019.101575
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420719304635
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2019.101575?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kozlova, Mariia & Fleten, Stein-Erik & Hagspiel, Verena, 2019. "Investment timing and capacity choice under rate-of-return regulation for renewable energy support," Energy, Elsevier, vol. 174(C), pages 591-601.
    2. Tang, Erzi & Peng, Chong, 2017. "A macro- and microeconomic analysis of coal production in China," Resources Policy, Elsevier, vol. 51(C), pages 234-242.
    3. Zhang, Fang & Deng, Hao & Margolis, Robert & Su, Jun, 2015. "Analysis of distributed-generation photovoltaic deployment, installation time and cost, market barriers, and policies in China," Energy Policy, Elsevier, vol. 81(C), pages 43-55.
    4. Pere Mir-Artigues & Pablo del Río, 2014. "Combining tariffs, investment subsidies and soft loans in a renewable electricity deployment policy," Working Papers 2014/23, Institut d'Economia de Barcelona (IEB).
    5. Chou, Shuo-Yan & Nguyen, Thi Anh Tuyet & Yu, Tiffany Hui-Kuang & Phan, Nguyen Ky Phuc, 2015. "Financial assessment of government subsidy policy on photovoltaic systems for industrial users: A case study in Taiwan," Energy Policy, Elsevier, vol. 87(C), pages 505-516.
    6. Fuisz-Kehrbach, Sonja-Katrin, 2015. "A three-dimensional framework to explore corporate sustainability activities in the mining industry: Current status and challenges ahead," Resources Policy, Elsevier, vol. 46(P1), pages 101-115.
    7. Zhang, Yu & Song, Junghyun & Hamori, Shigeyuki, 2011. "Impact of subsidy policies on diffusion of photovoltaic power generation," Energy Policy, Elsevier, vol. 39(4), pages 1958-1964, April.
    8. Grau, Thilo & Huo, Molin & Neuhoff, Karsten, 2012. "Survey of photovoltaic industry and policy in Germany and China," Energy Policy, Elsevier, vol. 51(C), pages 20-37.
    9. Avril, S. & Mansilla, C. & Busson, M. & Lemaire, T., 2012. "Photovoltaic energy policy: Financial estimation and performance comparison of the public support in five representative countries," Energy Policy, Elsevier, vol. 51(C), pages 244-258.
    10. Gungah, Aarti & Emodi, Nnaemeka Vincent & Dioha, Michael O., 2019. "Improving Nigeria's renewable energy policy design: A case study approach," Energy Policy, Elsevier, vol. 130(C), pages 89-100.
    11. Abu-Shikhah, Nazih M. & Hiasat, Ahmed A. & Al-Rabadi, Wijdan J., 2012. "A photovoltaic proposed generation promotion policy—The case of Jordan," Energy Policy, Elsevier, vol. 49(C), pages 154-163.
    12. Xunpeng Shi & Hengsi Chen & Yang Yu & Fushuan Wen, 2018. "Development of variable renewable energy policy in developing countries: a case study of Sri Lanka," International Journal of Public Policy, Inderscience Enterprises Ltd, vol. 14(1/2), pages 10-29.
    13. Hagerman, Shelly & Jaramillo, Paulina & Morgan, M. Granger, 2016. "Is rooftop solar PV at socket parity without subsidies?," Energy Policy, Elsevier, vol. 89(C), pages 84-94.
    14. Shi, Xunpeng & Liu, Xiying & Yao, Lixia, 2016. "Assessment of instruments in facilitating investment in off-grid renewable energy projects," Energy Policy, Elsevier, vol. 95(C), pages 437-446.
    15. Simsek, Yeliz & Lorca, Álvaro & Urmee, Tania & Bahri, Parisa A. & Escobar, Rodrigo, 2019. "Review and assessment of energy policy developments in Chile," Energy Policy, Elsevier, vol. 127(C), pages 87-101.
    16. Zhang, Sufang & He, Yongxiu, 2013. "Analysis on the development and policy of solar PV power in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 21(C), pages 393-401.
    17. Zhang, Huiming & Xu, Zhidong & Sun, Chuanwang & Elahi, Ehsan, 2018. "Targeted poverty alleviation using photovoltaic power: Review of Chinese policies," Energy Policy, Elsevier, vol. 120(C), pages 550-558.
    18. Shem, Caitlin & Simsek, Yeliz & Hutfilter, Ursula Fuentes & Urmee, Tania, 2019. "Potentials and opportunities for low carbon energy transition in Vietnam: A policy analysis," Energy Policy, Elsevier, vol. 134(C).
    19. Zhi, Qiang & Sun, Honghang & Li, Yanxi & Xu, Yurui & Su, Jun, 2014. "China’s solar photovoltaic policy: An analysis based on policy instruments," Applied Energy, Elsevier, vol. 129(C), pages 308-319.
    20. Gao, Xue & Rai, Varun, 2019. "Local demand-pull policy and energy innovation: Evidence from the solar photovoltaic market in China," Energy Policy, Elsevier, vol. 128(C), pages 364-376.
    21. Neuhoff, Karsten & De Vries, Laurens, 2004. "Insufficient incentives for investment in electricity generations," Utilities Policy, Elsevier, vol. 12(4), pages 253-267, December.
    22. Doukas, Haris & Patlitzianas, Konstantinos D. & Psarras, John, 2006. "Supporting sustainable electricity technologies in Greece using MCDM," Resources Policy, Elsevier, vol. 31(2), pages 129-136, June.
    23. Huang, Yuanxi & Todd, Daniel & Zhang, Lei, 2011. "Capitalizing on energy supply: Western China's opportunity for development," Resources Policy, Elsevier, vol. 36(3), pages 227-237, September.
    24. Pere Mir-Artigues & Pablo del Río, 2014. "Combining tariffs, investment subsidies and soft loans in a renewable electricity deployment policy," Working Papers 2014/23, Institut d'Economia de Barcelona (IEB).
    25. Karsten Neuhoff & Laurens De Vries, 2004. "Insufficient Incentives for Investment," Working Papers EP42, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    26. Huo, Mo-lin & Zhang, Dan-wei, 2012. "Lessons from photovoltaic policies in China for future development," Energy Policy, Elsevier, vol. 51(C), pages 38-45.
    27. Hoppmann, Joern & Peters, Michael & Schneider, Malte & Hoffmann, Volker H., 2013. "The two faces of market support—How deployment policies affect technological exploration and exploitation in the solar photovoltaic industry," Research Policy, Elsevier, vol. 42(4), pages 989-1003.
    28. Zhang, M.M. & Wang, Qunwei & Zhou, Dequn & Ding, H., 2019. "Evaluating uncertain investment decisions in low-carbon transition toward renewable energy," Applied Energy, Elsevier, vol. 240(C), pages 1049-1060.
    29. Zhao, Xingang & Zeng, Yiping & Zhao, Di, 2015. "Distributed solar photovoltaics in China: Policies and economic performance," Energy, Elsevier, vol. 88(C), pages 572-583.
    30. Jung, Jinho & Tyner, Wallace E., 2014. "Economic and policy analysis for solar PV systems in Indiana," Energy Policy, Elsevier, vol. 74(C), pages 123-133.
    31. Zhao, Zhen-yu & Zhang, Shuang-ying & Zuo, Jian, 2011. "A critical analysis of the photovoltaic power industry in China – From diamond model to gear model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4963-4971.
    32. Mir-Artigues, Pere & del Río, Pablo, 2014. "Combining tariffs, investment subsidies and soft loans in a renewable electricity deployment policy," Energy Policy, Elsevier, vol. 69(C), pages 430-442.
    33. Zhang, Tong & Shi, Xunpeng & Zhang, Dayong & Xiao, Junji, 2019. "Socio-economic development and electricity access in developing economies: A long-run model averaging approach," Energy Policy, Elsevier, vol. 132(C), pages 223-231.
    34. Pavel, Claudiu C. & Lacal-Arántegui, Roberto & Marmier, Alain & Schüler, Doris & Tzimas, Evangelos & Buchert, Matthias & Jenseit, Wolfgang & Blagoeva, Darina, 2017. "Substitution strategies for reducing the use of rare earths in wind turbines," Resources Policy, Elsevier, vol. 52(C), pages 349-357.
    35. Bazhanov, Andrei V., 2015. "Inefficiency and sustainability," Resources Policy, Elsevier, vol. 45(C), pages 210-216.
    36. Malagueta, Diego & Szklo, Alexandre & Borba, Bruno Soares Moreira Cesar & Soria, Rafael & Aragão, Raymundo & Schaeffer, Roberto & Dutra, Ricardo, 2013. "Assessing incentive policies for integrating centralized solar power generation in the Brazilian electric power system," Energy Policy, Elsevier, vol. 59(C), pages 198-212.
    37. Branker, K. & Pathak, M.J.M. & Pearce, J.M., 2011. "A review of solar photovoltaic levelized cost of electricity," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4470-4482.
    38. Liao, Xianchun & Shi, Xunpeng (Roc), 2018. "Public appeal, environmental regulation and green investment: Evidence from China," Energy Policy, Elsevier, vol. 119(C), pages 554-562.
    39. Wang, Qunwei & Hang, Ye & Su, Bin & Zhou, Peng, 2018. "Contributions to sector-level carbon intensity change: An integrated decomposition analysis," Energy Economics, Elsevier, vol. 70(C), pages 12-25.
    40. Zhang, Sufang & Andrews-Speed, Philip & Ji, Meiyun, 2014. "The erratic path of the low-carbon transition in China: Evolution of solar PV policy," Energy Policy, Elsevier, vol. 67(C), pages 903-912.
    41. Zafar, Muhammad Wasif & Zaidi, Syed Anees Haider & Sinha, Avik & Gedikli, Ayfer & Hou, Fujun, 2019. "The role of stock market and banking sector development, and renewable energy consumption in carbon emissions: Insights from G-7 and N-11 countries," Resources Policy, Elsevier, vol. 62(C), pages 427-436.
    42. Dusonchet, L. & Telaretti, E., 2015. "Comparative economic analysis of support policies for solar PV in the most representative EU countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 986-998.
    43. Yang, Fei-fei & Zhao, Xin-gang, 2018. "Policies and economic efficiency of China's distributed photovoltaic and energy storage industry," Energy, Elsevier, vol. 154(C), pages 221-230.
    44. Hay, James L., 2009. "Challenges to liberalism: The case of Australian energy policy," Resources Policy, Elsevier, vol. 34(3), pages 142-149, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luo, Guoliang & Liu, Yingxuan & Zhang, Liping & Xu, Xuan & Guo, Yiwei, 2021. "Do governmental subsidies improve the financial performance of China’s new energy power generation enterprises?," Energy, Elsevier, vol. 227(C).
    2. Liu, Jicheng & Lu, Yunyuan, 2022. "Research on the evaluation of China's photovoltaic policy driving ability under the background of carbon neutrality," Energy, Elsevier, vol. 250(C).
    3. Qiaoqiao Zhan & Katsunori Furuya & Xiaolan Tang & Zhehui Li, 2024. "Policy Development in China’s Protected Scenic and Historic Areas," Land, MDPI, vol. 13(2), pages 1-24, February.
    4. Pan, Xianyou & Yuan, Ge & Wu, Xianhua & Xie, Pinjie, 2023. "The effects of government subsidies on the economic profits of hydrogen energy enterprises – An analysis based on A-share listed enterprises in China," Renewable Energy, Elsevier, vol. 211(C), pages 445-451.
    5. Wang, Di & Zhang, Zhiyuan & Yang, Xiaodi & Zhang, Yanfang & Li, Yuman & Zhao, Yueying, 2021. "Multi-scenario simulation on the impact of China's electricity bidding policy based on complex networks model," Energy Policy, Elsevier, vol. 158(C).
    6. Bossink, Bart, 2020. "Learning strategies in sustainable energy demonstration projects: What organizations learn from sustainable energy demonstrations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    7. Bórawski, Piotr & Holden, Lisa & Bełdycka-Bórawska, Aneta, 2023. "Perspectives of photovoltaic energy market development in the european union," Energy, Elsevier, vol. 270(C).
    8. Li, Jianglong & Ho, Mun Sing, 2022. "Indirect cost of renewable energy: Insights from dispatching," Energy Economics, Elsevier, vol. 105(C).
    9. Guo, Xiaopeng & Dong, Yining & Ren, Dongfang, 2023. "CO2 emission reduction effect of photovoltaic industry through 2060 in China," Energy, Elsevier, vol. 269(C).
    10. Chong, Zhaotian & Wang, Qunwei & Wang, Lei, 2023. "Is the photovoltaic power generation policy effective in China? A quantitative analysis of policy synergy based on text mining," Technological Forecasting and Social Change, Elsevier, vol. 195(C).
    11. Lin, Boqiang & Xie, Yongjing, 2023. "The impact of government subsidies on capacity utilization in the Chinese renewable energy industry: Does technological innovation matter?," Applied Energy, Elsevier, vol. 352(C).
    12. Xin-gang, Zhao & Wei, Wang & Ling, Wu, 2021. "A dynamic analysis of research and development incentive on China's photovoltaic industry based on system dynamics model," Energy, Elsevier, vol. 233(C).
    13. Bigerna, Simona & Ceccacci, Francesca & Micheli, Silvia & Polinori, Paolo, 2023. "Between saying and doing for ensuring energy resources supply: The case of Italy in time of crisis," Resources Policy, Elsevier, vol. 85(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chong, Zhaotian & Wang, Qunwei & Wang, Lei, 2023. "Is the photovoltaic power generation policy effective in China? A quantitative analysis of policy synergy based on text mining," Technological Forecasting and Social Change, Elsevier, vol. 195(C).
    2. Zhang, Fang & Deng, Hao & Margolis, Robert & Su, Jun, 2015. "Analysis of distributed-generation photovoltaic deployment, installation time and cost, market barriers, and policies in China," Energy Policy, Elsevier, vol. 81(C), pages 43-55.
    3. Sommerfeldt, Nelson & Madani, Hatef, 2017. "Revisiting the techno-economic analysis process for building-mounted, grid-connected solar photovoltaic systems: Part one – Review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1379-1393.
    4. Corwin, Samuel & Johnson, Timothy L., 2019. "The role of local governments in the development of China's solar photovoltaic industry," Energy Policy, Elsevier, vol. 130(C), pages 283-293.
    5. Shuai Wang & Yao Li & Junjun Jia, 2022. "How to promote sustainable adoption of residential distributed photovoltaic generation in China? An employment of incentive and punitive policies," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 27(2), pages 1-26, February.
    6. Liu, Chang & Liu, Linlin & Zhang, Dayong & Fu, Jiasha, 2021. "How does the capital market respond to policy shocks? Evidence from listed solar photovoltaic companies in China," Energy Policy, Elsevier, vol. 151(C).
    7. Wang, Hongwei & Zheng, Shilin & Zhang, Yanhua & Zhang, Kai, 2016. "Analysis of the policy effects of downstream Feed-In Tariff on China’s solar photovoltaic industry," Energy Policy, Elsevier, vol. 95(C), pages 479-488.
    8. Ruyin Long & Wenhua Cui & Qianwen Li, 2017. "The Evolution and Effect Evaluation of Photovoltaic Industry Policy in China," Sustainability, MDPI, vol. 9(12), pages 1-40, November.
    9. Kayser, Dirk, 2016. "Solar photovoltaic projects in China: High investment risks and the need for institutional response," Applied Energy, Elsevier, vol. 174(C), pages 144-152.
    10. Yu-Ling Hsiao, Cody & Ai, Dan & Wei, Xinyang & Sheng, Ni, 2021. "The contagious effect of China’s energy policy on stock markets: The case of the solar photovoltaic industry," Renewable Energy, Elsevier, vol. 164(C), pages 74-86.
    11. Shubbak, Mahmood H., 2019. "The technological system of production and innovation: The case of photovoltaic technology in China," Research Policy, Elsevier, vol. 48(4), pages 993-1015.
    12. Pei-Hsuan Tsai & Chih-Jou Chen & Ho-Chin Yang, 2021. "Using Porter’s Diamond Model to Assess the Competitiveness of Taiwan’s Solar Photovoltaic Industry," SAGE Open, , vol. 11(1), pages 21582440209, January.
    13. Kejia Yang & Johan Schot & Bernhard Truffer, 2020. "Shaping the Directionality of Sustainability Transitions: The Diverging Development Patterns of Solar PV in Two Chinese Provinces," SPRU Working Paper Series 2020-14, SPRU - Science Policy Research Unit, University of Sussex Business School.
    14. Aotian Song & Lin Lu & Zhizhao Liu & Man Sing Wong, 2016. "A Study of Incentive Policies for Building-Integrated Photovoltaic Technology in Hong Kong," Sustainability, MDPI, vol. 8(8), pages 1-21, August.
    15. Han, Mengyao & Xiong, Jiao & Wang, Siyuan & Yang, Yu, 2020. "Chinese photovoltaic poverty alleviation: Geographic distribution, economic benefits and emission mitigation," Energy Policy, Elsevier, vol. 144(C).
    16. Zhang, M.M. & Zhang, C. & Liu, L.Y. & Zhou, D.Q., 2020. "Is it time to launch grid parity in the Chinese solar photovoltaic industry? Evidence from 335 cities," Energy Policy, Elsevier, vol. 147(C).
    17. Ramírez, F. Javier & Honrubia-Escribano, A. & Gómez-Lázaro, E. & Pham, Duc T., 2017. "Combining feed-in tariffs and net-metering schemes to balance development in adoption of photovoltaic energy: Comparative economic assessment and policy implications for European countries," Energy Policy, Elsevier, vol. 102(C), pages 440-452.
    18. Mohammad Esmailzadeh & Siamak Noori & Alireza Aliahmadi & Hamidreza Nouralizadeh & Marcel Bogers, 2020. "A Functional Analysis of Technological Innovation Systems in Developing Countries: An Evaluation of Iran’s Photovoltaic Innovation System," Sustainability, MDPI, vol. 12(5), pages 1-20, March.
    19. Zhang, Minhui & Zhang, Qin, 2020. "Grid parity analysis of distributed photovoltaic power generation in China," Energy, Elsevier, vol. 206(C).
    20. Zhang, Xiaoling & Wang, Yue, 2017. "How to reduce household carbon emissions: A review of experience and policy design considerations," Energy Policy, Elsevier, vol. 102(C), pages 116-124.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:65:y:2020:i:c:s0301420719304635. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.