Cost and CO2 reductions of solar photovoltaic power generation in China: Perspectives for 2020

To improve the understanding of the cost and benefit of photovoltaic (PV) power generation in China, we analyze the per kWh cost, fossil energy replacement and level of CO2 mitigation, as well as the cost per unit of reduced CO2 of PV power generation in 2020 at the province level. Three potential PV systems are examined: large-scale PV (LSPV), building-integrated PV (BIPV), and distributed PV systems used in remote rural areas (which have very low capacities). The results show that in 2020 PV power generation could save 17.4 Mtce fossil energy and 46.5 Tg CO2, compared with 600 MWe coal-fired supercritical units. Also in 2020, the costs of solar electricity could be reduced by approximately 60% as compared to 2010, but would still be 11-74% higher than the current grid prices. The PV electricity costs vary significantly among provinces. In the economically developed eastern provinces, the PV electricity (mainly BIPV) is 0.67-0.86 RMB/kWh. This rate is close to grid parity owing to high grid prices, but the CO2 mitigation cost is high (456-693 RMB/Mg CO2). The PV electricity (mainly LSPV) in solar-resource-rich western provinces has lower cost (0.45-0.75 RMB/kWh) and lower CO2 mitigation cost (172-419 RMB/Mg CO2), but is farther from grid parity due to the low local grid price. From a cost-effective perspective, LSPV in the west provinces should be the first priority in PV deployment strategies, and should receive strong financial support from the government. This study provides a quantitative, province-specific analysis of PV power generation, which can be used to support various PV subsidy policies.