Of course, the fact that subsidies are needed to stimulate installations still requires that the subsidy come from somewhere. From a macro economic viewpoint, solar is still more expensive than other electric sources, or going without. Plus, without some kind of energy storage (which makes the price much greater), this is still a solution that only works when the sun shines.
Feed-in tariffs generally have a mechanism to reduce the subsidy over time as technology gets cheaper. But for the economy as a whole, it's better to let competing energy prices rise to a level where solar is competitive. It's clear from the rapid improvements in solar recently that the solar industry always could improve its technology fast enough whether the incentive is subsidies or rising energy prices. The pricing mechanism does not affect how fast the technology can develop.
China is on a solar installation tear and is on track to reach the same capacity as the United States this year, according to the recent Solarbuzz China Deal Tracker Report.
Falling module and balance of system prices have driven the solar photovoltaic (PV) installation boom within the non-residential sector, which saw its pipeline of projects grow to 16 gigawatts at the end of October.
Solarbuzz identified 1,104 non-residential projects in China that are installed, being installed or in development. About 86 percent of the total project pipeline is occurring within 10 Chinese provinces. The Qinghai province, which has been helped by an incentives program, led the pack with 26 percent of the project pipeline.
And more is slated to come on line thanks to falling costs and the addition of a national feed-in tariff policy. According to the report, 195 projects with a total capacity of more than 1.8 GW will be installed this year. That will closely match the installed capacity in the U.S. this year, Solarbuzz said.
Feed-in tariffs in China were once considered too low to encourage projects in regions that didn’t have high solar radiation. Now that costs for modules and mounting equipment have fallen, project profitability has improved. Meaning it’s become cheap enough for less-than-sunny regions to install solar.
Photo: Flickr user peruisay
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