In 2014, the national forecast predicted that total photovoltaic power generation in China would reach 14GW. Early in the year, the National Energy Administration increased the target for distributed photovoltaics from 6GW in 2013 to 8GW. However, achieving this goal proved challenging. What are the main obstacles hindering the growth of China's distributed photovoltaic industry?
**1. Financing Challenges**
Financing has long been a critical issue for the solar industry. Despite various innovative approaches such as crowdfunding, government-led investment funds, and private equity participation, many companies still struggle to secure capital. Major banks remain cautious, with only the China Development Bank (CDB) showing some interest. However, CDB has not yet issued loans to any of the national distributed PV demonstration zones. The uncertainty around returns and slow project development have made investors hesitant. While new financial models are emerging, the lack of clear government support continues to hinder progress.
**2. Model Limitations in Distributed PV**
There are two main approaches being considered to boost distributed PV: increasing electricity prices or implementing a fully grid-connected model with full subsidies. Both options come with trade-offs. Raising electricity rates faces public resistance, and it’s unclear whether it would truly drive adoption. On the other hand, a fully subsidized grid-connected model may be unrealistic in the short term but could become feasible as coal prices rise. Finding a balanced approach that supports growth without sacrificing economic stability remains a challenge.
**3. Industrial Restructuring Needs**
The industry must undergo significant transformation to ensure sustainable development. After the "solar winter," many manufacturers closed down, but underlying issues like poor product quality and overproduction remained. To move forward, the sector needs to shift from mass production to high-value services, such as building-integrated photovoltaics. Companies should focus on specialized roles, leading to healthier competition and more efficient market operations.
**4. Barriers to Rooftop Installations**
Photovoltaic systems rely heavily on available space, particularly rooftops. High-quality locations are limited, making them a scarce resource. As large-scale projects in western regions become saturated, the focus is shifting to residential and private rooftops. This presents a huge opportunity—often referred to as the "blue ocean" of the market. However, progress in this area is slow due to regulatory, technical, and financial barriers. Encouraging home-based installations will require better policies, lower costs, and increased awareness.
Despite these challenges, the Chinese photovoltaic industry is gradually evolving. With continued innovation, supportive policies, and improved financing mechanisms, the sector is expected to grow stronger in the coming years.
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