Cost, policy, and potential of small scale solar photovoltaic installations in China

Abstract

Over the past years China has developed into the globally dominant producer in the solar photovoltaic (PV) industry with the vast majority of production being exported. Despite staggering growth in electricity demand and high levels of insolation in large parts of the country, by 2008 only 1% of global PV installations were based in China. Recently, the government has become more aware of this disconnect and has stated grand ambitions in expanding solar PV installations. In this thesis, I try to analyze how China could efficiently stimulate widespread deployment of distributed PV. I conclude that the cost of installing small scale PV in China has decreased by more than 40% during the period 2005 - 2009. By the end of this decade, I expect that it will be viable for small businesses in highly insolated provinces to install distributed PV as its costs per kWh have fallen below electricity tariffs. From a policymaker's perspective, for most provinces distributed PV is likely to remain more expensive than, for example, coal and wind generated electricity. The provinces of Qinghai, Gansu, and Guangxi have the best potential to form the exception. To stimulate widespread deployment of distributed PV, a province specific feed-in tariff (FIT) with an annually decreasing payout is likely to be the most efficient program for small scale systems, although upfront subsidies could be more efficient for larger scale systems. It is nevertheless questionable to what extent China's bureaucracy is able to implement a FIT program efficiently.

Date of Award	2011
Original language	American English
Supervisor	Georgeta Vidican (Supervisor)