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China’s Push For Rooftop Solar and Rural Wind Boosts Producers

China’s Push For Rooftop Solar and Rural Wind Boosts Producers

China’s plans to expand rooftop solar installations and the use of wind turbines is expected to deliver another boost to the nation’s clean energy companies. 

A pilot program to accelerate the use of rooftop solar received more applications from cities and counties than predicted, while the National Energy Administration has announced a massive build-out of distributed wind power in rural areas in central and southeast China.

The measures are likely to speed up installations of renewable power and will benefit wind developers, turbine manufacturers and solar producers, according to Dennis Ip, an analyst with Daiwa Capital Markets. The firms set to benefit include China’s top wind turbine maker Xinjiang Goldwind Science & Technology Co. and the world’s largest manufacturer of solar panels, LONGi Green Energy Technology Co.

Rooftop solar is gaining ground in China, and installations so far this year have soared 161% from the same period in 2020, according to BloombergNEF. The rush is being spurred by subsidies that expire at the end of the year, as well as a policy shift that allows local governments to pool their purchasing power for bigger orders. 

Pilot Scheme

The NEA in June invited cities and counties to apply to join a pilot scheme to improve uptake even further. The program envisions that, by the end of 2023, pilot locations would have solar panels covering over 50% of the available area at government buildings, 40% at schools and hospitals, 30% for industrial buildings and 20% for rural households. The small-scale solar installations are connected to the grid, which can send surplus power to other users locally.

This week, the NEA said it received applications from 676 cities and counties in 31 provinces and regions. That’s more than the 22 regions that were expected to take part, Ip said in a note on Tuesday. 

The richer, more built-up provinces in central and eastern China filed the majority of the applications, with Shandong, Henan, and Jiangsu contributing nearly 30% of the total. 

Jiangsu, for one, faces high electricity prices and “lacks the land resources to develop large-scale solar power plants,” Zhang Guoxing, head of the province’s solar industry association said at a conference in Nanjing on Wednesday. “Large-scale development and utilization of distributed solar is an important way for Jiangsu Province to achieve the carbon peak goal.” 

Zhang estimated that Jiangsu has the rooftop capacity to deploy more than 130 gigawatts of solar, equivalent to about 22% of the province’s current electricity consumption. 

NEA Vice President Wang Dapeng last week said China plans to implement a distributed wind farm program. The program could translate to 200 gigawatts of capacity installed through 2025 and 1,000 gigawatts in the long run, Ip said in a second note on Wednesday.

©2021 Bloomberg L.P.

With assistance from Bloomberg