Analysis of distributed-generation photovoltaic deployment, installation time and cost, market barriers, and policies in China

• We review China's distributed PV market development and policy changes since 2013.
• We present cost and time requirements for installing distributed PV in China.
• We conduct IRR analysis of distributed PV under different policy frameworks.
• We identify barriers to China's distributed PV, especially feed-in tariff barriers.

Beginning in 2013, China's photovoltaic (PV) market-development strategy witnessed a series of policy changes aimed at making distributed-generation PV (DG PV) development an equal priority with large-scale PV development. This article reviews the DG PV policy changes since 2013 and examines their effect on China's domestic DG PV market. Based on a 2014 survey of DG PV market and policy participants, we present cost and time breakdowns for installing DG PV projects in China, and we identify the main barriers to DG PV installation. We also use a cash flow model to determine the relative economic attractiveness of DG PV in several eastern provinces in China. The main factors constraining DG PV deployment in China include financial barriers resulting from the structure of the self-consumption feed-in tariff (FIT), ambivalence about DG PV within grid companies, complicated ownership structures for buildings/rooftops/businesses, and the inherent time lag in policy implementation from the central government to provincial and local governments. We conclude with policy implications and suggestions in the context of DG PV policy changes the Chinese government implemented in September 2014.