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 monitoring and evaluation system designed to assess the conditions of the photovoltaic market. The evaluation results are categorized into three levels: green, orange, and red. These assessments target general photovoltaic power stations and leading base projects, excluding village-level photovoltaic systems and distributed photovoltaic installations.
As the country with the largest installed solar capacity globally, China is now placing greater emphasis on monitoring the photovoltaic market environment. The National Energy Administration issued a notice to establish a monitoring and evaluation mechanism aimed at improving the construction and operational environment for photovoltaic power generation, guiding rational investment from enterprises, and ensuring the industry continues to grow in a stable and sustainable manner. Recently, issues like "abandoned light" and "power curtailment" have resurfaced, drawing renewed public attention as renewable energy production saw a rebound in the first three quarters of this year.
The monitoring and evaluation system focuses on standard photovoltaic power plants and key base projects, not including small-scale village-level or distributed systems. It combines comprehensive evaluations with specific performance indicators. Both competitiveness and risk assessment metrics carry equal weight, ensuring that ground-mounted power stations and regional leaders are evaluated holistically.
The National Energy Administration conducts these evaluations on a provincial basis. Competitiveness indicators include factors such as land availability, local government support, grid service quality, national subsidy intensity, average reductions in subsidies for competitive projects, and local financial support. According to an official, the evaluation results serve as a crucial reference for adjusting and refining policies, guiding the orderly development of solar resources.
The level of power abandonment will be a key factor in assessing the photovoltaic market environment, directly influencing the allocation of annual construction scales. In regions with multiple photovoltaic resource zones, each area will be evaluated separately. The system considers both market development and investment risks, using two types of indicators—competitiveness and risk. Results are classified into three levels: green (favorable), orange (moderate), and red (concerning).
In areas rated red, the Energy Bureau will generally not approve new photovoltaic construction projects during the year the evaluation is released, except for state-established new energy bases linked to UHV transmission lines. Industry experts believe this policy aims to drive technological advancement, industrial upgrades, and cost reductions in solar power. Through regulatory measures, companies are expected to accelerate their innovation to lower project costs.
This move has finally provided a clear institutional framework for strictly controlling photovoltaic expansion in areas with high abandonment rates, acting as a constraint on industry players. The notice also mandates regular reporting of evaluation results, with data collected through provincial statistics and company sampling. The National Renewable Energy Information Management Center will oversee the process, releasing quarterly updates. The previous year’s results will be published in the first quarter of each year.
So far, provinces like Zhejiang and Shandong have already implemented local measures to adjust photovoltaic construction quotas and tighten industry standards. With a series of "clear," "strengthened," and "evaluated" policies in place, China's photovoltaic sector is expected to develop in a more rational and controlled direction. At the same time, the gradual reduction in subsidies and grid-connected prices is becoming an inevitable trend. Companies with high-efficiency technologies that help reduce electricity costs will gain a competitive edge in the long run.
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