China's NEA has released “Draft Management Measures for Distributed Solar Power Development and Construction, Edition for Public Consultation.” The draft guidelines are designed to reshape the country’s distributed solar sector.
They will be open for feedback from Oct. 9 to Nov. 8, 2024. They will replace the 2013 version of the guidelines and represent a significant regulatory shift.
The 2024 draft introduces key revisions, classifying distributed solar projects into residential and commercial and industrial (C&I) categories, with other distinctions for size. C&I projects will be divided into general (up to 6 MW) and large-scale (6 MW to 50 MW) categories. Projects above 50 MW will no longer be considered “distributed solar.”
A notable change is the removal of guaranteed grid access for distributed solar – a promise that was included in the 2013 version. The three grid connection models – full grid feed-in, self-use, and self-use with surplus feed-in – remain, but large-scale C&I projects will be restricted to full self-use with anti-reverse flow systems. This limits options, but surplus electricity may still be sold to the grid in the future.
The draft introduces unique identification codes for projects, streamlining management for trading, financing, and oversight. The new rules also include legal recognition of microgrids, which integrate solar, storage, and grid connectivity. Microgrids must be owned by a single entity, while C&I projects can switch grid connection types once, from full self-use to self-use with surplus feed-in.
The 2024 draft also introduces a green certificate system, requiring all distributed solar projects to participate in electricity market trading. This system offers financial incentives for green energy, encouraging investment.
However, the draft imposes new financial burdens on C&I solar projects, including local taxes and fees, aligning their costs with large-scale self-supplied industrial plants. This could lead to the renegotiation of energy management contracts between investors and power users.
Regional governments will now manage off-grid solar power stations, and a queue system for grid connections will be implemented when capacity is constrained, preventing abrupt project halts seen in the past, said the NEA.
While tighter regulations may slow short-term growth in C&I solar projects, especially in agrivoltaics and solar highway installations, the industry could recover as grid capacity expands and financial support from green certificates grows, allowing for sustainable long-term growth.
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