The Energy Bureau recently released the "Circular on Establishing a Market Environment Monitoring and Evaluation Mechanism to Guide the Healthy and Orderly Development of the PV Industry." This document outlines a scientific system for monitoring and evaluating the photovoltaic market. The evaluation results are categorized into three levels: green, orange, and red. The focus of this monitoring includes general photovoltaic power stations and leading base projects, but excludes village-level photovoltaic systems and distributed solar installations.
As the world's largest producer of photovoltaic capacity, China is now placing greater emphasis on monitoring the environment of the solar power sector. The National Energy Administration issued a notice aimed at establishing a robust monitoring and evaluation mechanism, with the goal of improving the construction and operational environment for photovoltaic power generation. It also seeks to guide enterprises toward rational investment and promote sustainable industry growth. Recently, issues like curtailment of solar energy and limited grid access have resurfaced, drawing renewed public attention.
The monitoring and evaluation system targets ordinary photovoltaic power plants and leading base projects, not including small-scale or distributed systems. The system combines comprehensive evaluations with binding indicators. These include competitiveness and risk assessment metrics, each carrying equal weight. Ground-mounted power stations and top performers across different regions are assessed from multiple angles.
The National Energy Administration conducts these evaluations at the provincial level. Competitiveness indicators cover aspects such as land availability, local government support, grid service quality, national subsidy intensity, reductions in competitive allocation project subsidies, and local financial support. According to an official, the evaluation outcomes serve as a key reference for adjusting and refining industry policies, ensuring the orderly development of solar resources.
Curtailment rates will be a major factor in assessing the photovoltaic market environment and will significantly influence the annual guidance scale for new projects. Provinces with multiple resource zones will be evaluated separately. The system considers both market conditions and investment risks, using two types of indicators—competitiveness and risk. Results are classified into three levels: green (favorable), orange (moderate), and red (challenging).
In areas rated red, the Energy Bureau will generally not approve additional photovoltaic construction capacity during the year the evaluation is published, except for state-established new energy bases linked to UHV transmission lines. Industry experts believe this policy aims to drive technological innovation, industrial upgrades, and cost reductions in solar power. By enforcing regulations and promoting policy-driven improvements, companies are expected to accelerate their technological advancements and lower electricity costs.
This move effectively imposes stricter controls on photovoltaic expansion in areas with high curtailment, creating a new regulatory framework that companies must follow. The notice also mandates regular reporting of evaluation results. Data will be collected through statistical analysis and surveys of photovoltaic companies. The National Renewable Energy Information Management Center will oversee the monitoring process, with quarterly updates and annual reports released by the National Energy Administration.
Currently, provinces like Zhejiang and Shandong have already introduced measures to adjust regional photovoltaic construction quotas and tighten industry standards. With a series of "clear," "strengthened," and "evaluated" actions in place, it is expected that China’s photovoltaic industry will develop in a more rational and controlled manner. At the same time, the gradual reduction of subsidies and grid-connected PV prices is becoming an inevitable trend. Companies with advanced technologies that help reduce solar power costs will gain a competitive edge in the evolving market.
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