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By Zhou Jianqi, Enterprise Research Institute, DRC & Mu Jing, Longi Green Energy Technology Co. Ltd.

Research Report, No. 39, 2020 (Total 5783) 2020-3-17

Abstract: Grid parity for photovoltaic (PV) industry is of practical significance for China to further lower power price. China has realized PV grid parity for distributed power consumers whereas most of the concentrated power stations are still facing PV grid parity issue. As a result, it is still difficult to put into effect grid parity across the board. Costs per kilowatt hour, which includes hard costs and soft costs, is an important indicator to evaluate PV grid parity. For the past decade, technological innovation has brought down hard costs by nearly 90 percent whereas soft costs have gone up to over 60 percent of the total. That’s why soft costs have become the major hurdle for realizing PV grid parity on a wider range. The current problems lie in unsound PV market services and the huge increase in concentrated PV stations’ operation costs caused by subsidy delays. It is advisable to take PV grid parity as one of the measures for further lowering power price, nurture a PV transaction market, and focus on lowering soft costs so as to address the subsidy issue for concentrated PV stations.

Key words: PV grid parity, soft costs, policy options