Chinese cities could go solar without subsidies

A study conducted by a research team from the KTH Royal Institute of Technology, Mälardalen University and Tsinghua University has determined that the cost of installing and operating non-subsidised photovoltaic solar energy panels in China’s major cities could be cheaper for these cities than purchasing energy from China’s national grid. The report determined that all 344 of China’s major cities currently have the potential to generate solar electricity at a lower cost than buying from the grid, with 22 per cent of these cities having the potential to generate this electricity at a lower cost than that of generation through coal, the largest contributor to China’s fuel mix.

The Chinese Government has been taking major steps in recent years to increase the country’s solar panel infrastructure. In the past 25 years, China has been developing this infrastructure through subsidies, producing some of the world’s largest solar panel farms like the Tengger Desert plant, at a faster rate than most other countries. While coal remains the main contributor to China’s fuel mix, these subsidies have promoted the rapid growth of the country’s solar capacity. However, a new series of policies is predicted to remove subsidies in the industry by 2021. China’s National Energy Administration plans to promote subsidy-free investment in solar infrastructure through policy support, in an attempt to promote the industry by removing regulatory hurdles. The plan is expected to create lower cash flow risks for solar projects and promote better co-operation in international projects, as the European Commission removed restrictions on the sale of Chinese solar panels following a removal of subsidies for utility-scale solar projects by the Chinese Government last June.

The research team also conducted a 2016 study on the impact of solar energy on rural Chinese grasslands, suggesting that photovoltaic water pumping systems provide high potential for improving forage productivity and contributing to meet the local demand. These studies indicate potential for local self-reliance throughout China, in the event that investment in local solar energy systems continues to rise following the removal of subsidy money.

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