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Is it time to launch grid parity in the Chinese solar photovoltaic industry? Evidence from 335 cities

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  • Zhang, M.M.
  • Zhang, C.
  • Liu, L.Y.
  • Zhou, D.Q.

Abstract

This study evaluates grid parity in the Chinese solar PV industry by calculating the unsubsidized unit profits (UUPs) of solar PV projects in 335 Chinese cities. Furthermore, the effects of technological advances and various electricity price mechanisms on grid parity are explored. We consider the differences between centralized grid-connected and distributed projects. Two-factor learning curves are used to forecast technological progress and two kinds of electricity price mechanisms—government-regulated and market-based—are also brought into analyses. The results indicate the infeasibility of implementing complete grid parity regardless of the type of project. However, centralized grid-connected projects in 5 cities and distributed projects in 129 cities could implement pilot grid parity. On the whole, centralized grid-connected project has a lower benefit performance than distributed projects. Resource Zone I, which consists of Ningxia Province and several western cities in Gansu, Xinjiang and Inner Mongolia, has the best benefit performance of three resource areas. Technological advances and variations in electricity prices under both mechanisms could improve the UUPs but raising them above zero in all cities would still be impossible. The market prices of electricity under market-based mechanisms may generally have greater impacts than do government-regulated mechanisms on the benefit performances throughout the whole nation.

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  • 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).
    • Handle: RePEc:eee:enepol:v:147:y:2020:i:c:s0301421520304596
    DOI: 10.1016/j.enpol.2020.111733
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    5. Xiaohua Song & Yamin Huang & Yulin Zhang & Wen Zhang & Zeqi Ge, 2023. "An Appraisal on China’s Feed-In Tariff Policies for PV and Wind Power: Implementation Effects and Optimization," Sustainability, MDPI, vol. 15(6), pages 1-23, March.
    6. Wang, Rong & Hasanefendic, Sandra & Von Hauff, Elizabeth & Bossink, Bart, 2022. "The cost of photovoltaics: Re-evaluating grid parity for PV systems in China," Renewable Energy, Elsevier, vol. 194(C), pages 469-481.
    7. Zhang, Alex Hongliang & Sirin, Selahattin Murat & Fan, Conglai & Bu, Maoliang, 2022. "An analysis of the factors driving utility-scale solar PV investments in China: How effective was the feed-in tariff policy?," Energy Policy, Elsevier, vol. 167(C).
    8. Yang, Changhui & Jiang, Qi & Cui, Yangyu & He, Lijun, 2023. "Photovoltaic project investment based on the real options method: An analysis of the East China power grid region," Utilities Policy, Elsevier, vol. 80(C).
    9. Lu, Jintao & Rong, Dan & Lev, Benjamin & Liang, Mengshang & Zhang, Chong & Gao, Yangyang, 2023. "Constraints affecting the promotion of waste incineration power generation project in China: A perspective of improved technology acceptance model," Technological Forecasting and Social Change, Elsevier, vol. 186(PB).

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