The Strategist

China Accelerates Solar Energy Goal for 2015

03/30/2015 - 19:47

The country with huge population of around 1.4 billion people has set an ambitious goal production more than three times its solar power capacity to 100 GW by 2020.

China Accelerates Solar Energy Goal for 2015
World’s topmost emitter of carbon dioxide is now aiming to install new solar projects with capacity of around 17.8 GW in 2015 (according to China’s National Energy Administration). China has increased the solar energy production target significantly for the year 2015 with the objective to fight air pollution. It is expected to raise its solar production capacity to more than 250% of capacity added by the US previous year. This goal will require huge additional investments of almost 21 billion Yuan in solar projects as compared to its previous plan.

China announcement of solar projects has sparked a steep rise in domestic solar companies stocks. This announcement is profitable for the equipment companies in China. The new target is also likely to shoot up the small solar projects installations that has been constantly promoted since 2013.

Rising industrialization and urban development in China has spurred the demand for energy that was met by fossil fuels. But, concurrently it led to a substantial increase in air pollution thereby positioning China as the world’s top emitter of greenhouse gas. Hence China is now reexamining its selection of energy source to fuel overall economic growth. China’s government is therefore offering striking subsidies to stimulate solar power production. As stated by NEA, subsidies for the year 2014 accounted for 19% of new PV installations. Still, China is facing challenges in enhancing solar production despite of worthy efforts. The growth of solar power projects is stunted by the insufficient infrastructure. In order to address the issue, China has stressed on distribution of rooftop solar panels. And consequently NEA set out a goal of 8GW of distributed solar power in 2015.

China produced nearly 12 GW of solar power in 2014 and missed its target by barely. However, the US was able to add 7.3 GW of solar capacity for the same year. This signals strong moves taken by China to curb its carbon emissions. Over the next couple of years, China will be utilizing more power of sun to reduce its emissions and boost its solar energy production. Chinese President has vowed to protect the world environment in November’s accord with US President Barack Obama to increase its proportion of renewable energy to the overall energy nearly to 20% by 2030.

During 2014, the carbon emissions by China dropped for the first time in the last decade which played a vital role in stalling CO2 production across the world. According to BNEF estimate, the carbon emissions declined 2% as compared to previous year, thereby indicating the increased alertness of the country to fight against pollution.

Although, the target is apparently quite ambitious, the financial as well as the regulatory background are well fit for the ramp up in solar energy. Moreover, provincial administration is becoming much more accustomed to solar expansion. NEA has demanded from the regional departments of as much as 26 provinces to present their comprehensive plans for solar power projects by April 2015.