China Plan To Whip Australia’s Ass in Domestic Solar Investment

Whilst many Australian state governments dither over the solar feed-in-tariff (FIT) issue, China has come charging out of the changing sheds recently with a brand new, highly-polished, national feed-in-tariff system.

They are kicking the world’s ass when it comes to high value manufacturing (where was your iPad made?) and now it looks like they are serious about installing solar power domestically.

Notice how the savvy Chinese let the West create the demand for solar panels, driving down the price of solar? Now solar is close to grid parity (perhaps only 12 months away) they are very smartly announcing their own Feed In Tariff to boost Chinese solar uptake and their domestic solar installation industry.

The announcement by the Chinese government’s National Development and Reform Commission earlier this month, that solar developers will receive 1.15 yuan (18 cents) per kilowatt-hour from grid operators as part of a nationwide bonus offer scheme, will kick start solar investment in the country. The program is part of a number of solar policies aimed at achieving the country’s target of gaining 15 percent of its energy needs from renewable sources by 2020.

But will this latest announcement prove to be a game changer in solar superpower terms?

Despite its well-deserved reputation as the world’s largest polluter (in part because of its reliance on coal from Australia to supply its massive energy needs), China has long led the way in renewable technologies in Asia, far outstripping investment in less forward looking economies in the region.

However in a coincidence that may well portend the changing of the guard from West to East on solar energy, the announcement from Beijing happened on the same day as the UK government announced a reduction in its own solar subsidies. The British government’s measures, implemented as part of an austerity measure (now where have we heard that before) will effectively end plans for large scale solar farms, according to a Business Green report.

The Chinese announcement has underlined Beijing’s attempt to rival Europe and gain solar superpower status, according to some analysts. Already the world’s biggest manufacturer of solar panels, the move will look to increase the number of domestic solar consumers.

The new feed-in-tariff has expectations that PV installation in the country will explode in popularity, according to the U.S.-based Natural Resources Defense Council’s Michael Davidson. The analyst said in an August 9 blogpost that Beijing had already revised upwards “…PV installation targets for 2015 twice, finally settling on 10 gigawatts – a ten-fold increase over the current capacity.”

According to a post in the National Geographic News by Mason Inman of Duke University’s Nicholas Institute for Environmental Policy Solutions, the national FIT move may trigger a wealth of solar initiatives. He said the solar FIT follows on from a similar and highly-successful bonus scheme introduced for the benefit of China’s wind energy industry.

Glancing around locally the news, of course, is grimmer for Aussie solar consumers and those considering investment in domestic solar energy. With the recent announcement by the Western Australian government that it was closing the state’s feed in tariff because it was “too popular” comes the news that the conservative government in Victoria may also follow suit.

As Australian solar customers glance towards their northern neighbour and their government’s pro-active renewable energy policies, is it any wonder they feel our own governments (state and federal) are being left behind in the changing rooms by comparison?