Economical assessment of large-scale photovoltaic power development in China

Photovoltaic (PV) power has a huge resource of supply, wide range of usage, and low impact on environment and it is considered as a key factor of the supply mix in the future for China. PV power is still in its infancy in China. It has higher cost than coal-fired power, and needs policy support. In recent years, China has launched a series of policies to stimulate PV power. These policies, however, are temporal, mainly because the total additional investment to make PV power grid parity is uncertain. After a brief review on current status of PV power development in China, this paper applies learning curve theory to study the cost reduction trends of polycrystalline silicon PV cells - main components of large-scale PV (LS-PV) power generation, then sets different scenarios to estimate time and the total learning cost of PV power’s grid parity. MESSAGE model is also applied to make a comparable estimation of the future PV installation in China. The results show that long-term subsidy policy for PV power is feasible in China with the rising cost of coal-fired power, but aggressive subsidy policy is not very efficient.

► We study the trend of cost reduction of PV power in China and the corresponding total learning cost.
► We calculate the change of total learning cost and time when PV power is cost competitive under different scenarios.
► Our analysis shows that long-term subsidy policy for PV power generation is feasible in China.
► China should carefully consider the cost effectiveness of subsidy policies, because aggressive subsidy strategy is not efficient.