China's national PV feed-in tariff launched this summer was expected to accelerate solar project development, and now the nation's PV pipeline stands at 14GW, says Solarbuzz in a new report.
There are 1007 nonresidential projects in China in some form of installation or development, including those tender-processed and planned without tenders. Of those, 707 are >1GW. Nonresidential PV project activity is now evident in 29 Chinese provinces. The report says the Northwest region, notably the provinces of Qinghai, Gansu, Ningxia, Inner Mongolia, is ripe for utility-scale projects, home to 'intense solar radiation' not to mention vast amounts of land, and thus currently accounts for two-thirds (66%) of that pipeline.
The report doesn't adequately take into consideration the drive, connections effectiveness of local leadership in explaining why Qinghai, Gansu, Ningxia, Inner Mongolia is 'ripe for utility-scale projects'. Take Ordos, Inner Mongolia as an example. The Ordos mayor's office and municipal government's power is the main reason the First Solar utility-level PV project is located there. The Northwest's 'intense solar radiation' is a factor but nothing compared to the provincial and municipal leadership's ability to steer projects their direction.
When analyzing why one region of the country has a strongly developing solar industry and another doesn't, politics is key. The problem is those connections are very opaque. Having said that, they are not impossible to uncover and understand. Just as Kenneth Lieberthal revolutionized China watching by introducing the xitong paradigm*, the time is ripe for someone to think originally about the relationships between the center and provincial NDRC's, municipal officials, specific solar companies, Ministry of Finance and everyone else involved in renewable energy projects in China.
The Solarbuzz report acknowledges that most leading project developers are state-owned, with the top 10 firms accounting for 8.7GW of the total pipeline. I don't blame the Solarbuzz analysts for not emphasizing politics enough in their analysis. It is incredibly difficult to get good info on the inner workings of the multiple party and government institutions. Solarbuzz's main point that the earlier-than-expected release of the national PV FiT policy has opened the door to explosive growth in project development activities in China is extremely sound.
More importantly, that strong growth in domestic demand is a great opportunity to Chinese module suppliers. There are still major questions about how the FiT will be implemented. However, Solarbuzz is spot on with its analysis that module suppliers Suntech, Yingli, GD Solar and Shanghai Aerospace Automobile Electromechanical, and Sungrow Power Supply in inverters will increasingly be selling the domestic market and their business plans will no longer be so reliant on exports.
*Anyone with even a passing interest in China's politics needs to have read Kenneth Lieberthal's "Governing China: From Revolution Through Reform". Plenty of people have poked holes in his argument but he broke ground and made us look at China differently. Hopefully there are PhD dissertations being written right now that will shed light on the renewable energy decision-making process, allocation of funds and personal connections involved.