China's 2013 solar plan focuses on on-grid installation

According to EnergyTrend's "Silver Member Report," the Chinese market may not be able to consume their 10GW target that they set at the beginning of 2013. The actual demand for China's market will only be 4.5-6GW. This is due mainly to the demands brought by the Golden Sun Program subsidy plan as well as PV plants in Western China in 2012/

Nevertheless, considering the global actual demand, China is still one of the world's top three solar markets (accounting for around 17 per cent of the global market). According to EnergyTrend, the Asian solar market will rise in 2013; Japan, India, and emerging countries in Southeast Asia have all showed an increase in demands, and China, with its significant potential, is more likely to stimulate demands compared with European countries such as Germany and Italy. Therefore, China's policy shift will be the major force that affects the global supply and demand.

To solve abandoned power issues, the Chinese government purchases power instead of implementing the Golden Sun Program.

China's solar installation demands mainly come from large-scale solar power plants, photovoltaic buildings, and the Golden Sun Program demonstration project. Though the total demand from the above three sources could be up to 12GW, the actual demand was disappointing. Projects approved by the government are concentrated in the second half of the year when climatic factors usually affect the construction progress; the grid standard and subsidy policy were just settled in the fourth quarter of last year, which shakes customers' confidence and hinders the business; companies did not receive subsidy after installing grid-connected systems, so they are not able to launch new projects. Due to the above reasons, grid installations in the market have been delayed.

In order to solve abandoned power issues caused by unsuccessful grid installations (installed systems that fail to generate grid-connected power), the Chinese government has currently terminated the Golden Sun Program subsidy plan (a subsidy for system construction) and instead started to purchase power with the purpose of enhancing the effectiveness of solar power systems. They plan to invest mainly in distributed systems and western large-scale power plants in 2013. On the other hand, in order to make up for the financial gap caused by previous solar installations, China's Ministry of Finance announced that starting at the end of March, they will pre-allocate subsidies for renewable energy and issue a capital of $386.43 million (2.43 billion RMB) or 16 per cent of the total renewable power subsidy for solar installations.