Analysis and comparison of photovoltaic power generation investment environment at home and abroad

1 Introduction

We all know that humankind is facing the dual constraints of the depletion of global fossil energy and the deterioration of the ecological environment. This year's Fukushima nuclear power plant accident in Japan has slowed down the development of nuclear power in many countries. Germany, Switzerland and Italy have announced permanent nuclear abandonment, which has brought severe challenges to the plans of many countries to vigorously develop nuclear power to replace fossil energy. If the development of renewable energy is not increased, it will affect the carbon emission planning indicators of various countries. Therefore, vigorously developing renewable energy has become a strategic choice for countries to build a sustainable energy system, achieve low-carbon economic transformation and develop safely.

Hydropower, biomass energy, wind power and solar energy resources have great potential, and the technology is mature or close to maturity, with good prospects for large-scale development and utilization. Accelerating the development of hydropower, biomass energy, wind power and solar energy, vigorously promoting the large-scale application of solar energy and geothermal energy in buildings, and reducing the proportion of coal in energy consumption are the primary goals of China's renewable energy development [1]. Solar power generation has the following advantages [2]: ① "Infinite" reserves. Solar energy is an inexhaustible renewable energy source. The energy released by the sun per second is about 1.6×1023kW, of which 8×1013kW reaches the earth, equivalent to 6×109 tons of standard coal; ② The universality of existence. Although the difference in latitude and climatic conditions causes uneven solar radiation, compared with other energy sources, solar energy is universal in most areas of the earth and can be used locally; ③ Clean utilization; ④ Economic utilization.

This article sorts out the application status of photovoltaic power generation at home and abroad, and focuses on summarizing the development plans and policy support status of renewable energy in various countries in the next (5-10) years. To help investors make macro decisions on when to invest in this field, the government can learn from the successful development experience of other countries and formulate energy development policies that are more in line with their own country.

2 Current status of solar energy resource utilization at home and abroad

2.1 Trends in my country’s installed capacity of solar power generation

Figure 1 Annual trend of photovoltaic power generation installed capacity in mainland my country

As can be seen from Figure 1, from 2006 to 2010, the newly installed photovoltaic capacity continued to rise. In 2009, China's annual newly installed photovoltaic capacity reached 160MW, exceeding the cumulative installed capacity by the end of 2008 (120MW). In 2010, the actual newly installed capacity exceeded 500MW[3]. In the "Golden Sun Demonstration Project and Solar Photovoltaic Building Application Demonstration Project" issued in 2010, it was publicly stated that the annual domestic application scale would not be less than 1,000MW after 2012. The latest China project tracking report released by the international photovoltaic research organization Solarbuzz stated that the actual installed capacity of the Chinese photovoltaic market in 2011 will exceed 1.6GW, an increase of more than 230% over 2010. There will be 1,007 photovoltaic projects, of which 707 are larger than 1MW[4].

2.2 Current status of solar energy resource utilization in China

In the 21st century, the state invested 2 billion to carry out the "power supply to villages" project, with an installed capacity of 20MW, solving the electricity problem of 800 villages (towns) without electricity in China[5].

In 2004, the 1MW grid-connected power generation project at the Shenzhen International Flower Expo Park became a highlight in my country’s photovoltaic application field[6].

In September 2005, the Shanghai Municipal Government launched the “100,000 Rooftop Photovoltaic Power Generation Plan.” In the same year, a 40-kilowatt rooftop grid-connected photovoltaic power generation system was also implemented in Wuxi, Jiangsu. Xuzhou was the first city in the country to use solar-powered bus stations, which can save about 1,000 kWh of electricity per year.[7]

In January 2006, Shenzhen passed the preliminary review of the Ministry of Construction’s city-level demonstration of renewable energy building applications (solar building integration) and plans to build 3 million square meters of solar energy application demonstration projects in the next five years[7].

The domestic hot water used in the Olympic Village of the 2008 Beijing Olympic Games mainly relied on solar energy. The main venue of the Olympic Games, the "Bird's Nest Project", was powered by solar energy for the first time, with a total installed capacity of 130kW of solar photovoltaic power generation system [7].
In
July 2009, the state successively introduced a series of policies to support the development of the photovoltaic industry, including the "Golden Sun" demonstration project and the "Rooftop Project".

In 2009, China's first photovoltaic power generation licensed demonstration project, a 10MW photovoltaic power station in Dunhuang, Gansu, started construction, marking the official launch of China's long-sluggish photovoltaic power generation market.

On September 30, 2011, the 60MW Phase III project of the Xitieshan Photovoltaic Power Station in Qinghai Province, invested and constructed by China General Nuclear Power Group, was officially completed and connected to the grid. The project is currently the largest single photovoltaic power generation base in operation in the country[8].

2.3 Trends in global solar power installed capacity

Figure 2 Comparison of the changing trends of global solar power installed capacity and my country's solar installed capacity

From 1998 to date, the annual growth rate of new photovoltaic power generation capacity worldwide has been 43%, and in the past five years, the growth rate has further increased to 56%. The total installed capacity of global photovoltaic power generation was 8.1GW in 2007, 12GW in 2008, and 18GW in 2009. In 2009, the global new installed capacity of photovoltaic power generation was 8GW, and in 2010, the total installed capacity of global photovoltaic power generation reached 26GW[9]. International consulting agency IHSiSupply recently stated that the global installed capacity in 2011 is estimated to reach 21.9GW, an increase of 25% over the previous year. Taking into account the influence of major countries such as China, Germany and Italy, the global photovoltaic market installed capacity in 2012 is expected to reach 24GW[10].

As can be seen from Figure 2, the total installed capacity of photovoltaic power generation in my country from 2006 to 2008 was quite small compared to the total installed capacity in the world. The specific capacity can be obtained from Figure 1. However, due to a series of photovoltaic incentive policies of the Chinese government, the installed capacity of my country's photovoltaic industry has also been rapidly increased every year. In 2010, the actual newly added installed capacity exceeded 500MW. In 2009, China's photovoltaic installation accounted for about 2% of the global total installation, which increased by about 1 percentage point in 2010. This shows that although my country is a world manufacturing center for photovoltaic cells, 90% of photovoltaic modules are exported and sold, and the domestic market has not been fully opened, which is seriously inconsistent with my country's strong photovoltaic module production capacity. The government needs to provide greater and stronger policy support.

2.4 Current status of solar energy resource power generation in other countries[11]

From 1980 to 2002, Japan, the United States, and Germany, the three major developed countries that developed photovoltaic power generation technology, invested a total of about 3.5 billion euros in research and development[12]. On February 16, 2005, the Kyoto Protocol, which aims to reduce greenhouse gas emissions, officially came into effect. In order to fulfill relevant obligations and show their stance, the European Union, Japan, and Western developed countries such as the United States and Australia, which did not sign the agreement, all launched renewable energy development plans, promoting the development of the photovoltaic industry.

(1) Japan

Japan has been actively developing new energy sources such as solar energy for many years. In 1994, it launched the "Japan New Sunshine Plan" to encourage residents to use solar power generation with a 50% subsidy. Its solar power generation has been ranked first in the world since 2000, with a domestic facility capacity of about 640,000 kW. By 2010, the Japanese government plans to increase domestic facility capacity by 7 times to 4.82 million kW. According to the photovoltaic, wind and solar thermal utilization plan announced by the Second New Energy Subcommittee of the Ministry of International Trade and Industry (MITI), Japan's photovoltaic power generation installed capacity will reach 5GW in 2010.

(2) United States

The United States' "Sunshine Life Model Project" and "1 Million Rooftop Photovoltaic Plan" - by installing a solar energy conversion system on the roof, the absorbed solar energy can be directly converted into electrical energy to support the daily energy consumption of residents' homes. Not only that, residents can also sell the stored excess electricity to the power company at a discount. The U.S. Energy Policy Act stipulates that from 2004 to 2007, $340 million will be allocated annually to the California government to encourage citizens to purchase new energy-saving products. In addition, state governments in the United States have also formulated local energy-saving product tax reduction policies. As long as companies install energy-saving equipment, they will receive great tax benefits[11].

(3) Germany

Germany's "100,000 Solar Roofs Plan" - In 1991, Germany formulated a plan to install solar cells on 1,000 roofs, with a total government subsidy of 1.1 billion marks and a zero loan interest rate with a 10-year repayment period. This greatly promoted the development of the photovoltaic market and industry, making Germany the fastest growing country in the world in photovoltaic power generation after Japan. In just 4 years (1999-2003), the German photovoltaic market increased 10 times and costs fell 20%.

Germany's "Million Roofs Project" has enabled many households to not only use solar energy to solve their own energy needs, but also become small "private power stations" that continuously supply electricity to the public power grid and earn a considerable income. The Kaiserslautern football stadium in Germany, one of the venues for the 2006 World Cup, uses solar lighting equipment[7].

From the above analysis, we can see that many countries in the world have formulated strong laws and regulations and incentive policies to drive the development of the photovoltaic industry and market. Therefore, it can be said that government drive is the fundamental force for the rapid development of the world's photovoltaic technology and industry.

3 Development prospects of photovoltaic power generation market at home and abroad

3.1 Domestic Photovoltaic Power Generation Market

In January 2006, the "Renewable Energy Law of the People's Republic of China" was promulgated. On December 26, 2009, the 12th meeting of the Standing Committee of the 11th National People's Congress voted to pass the "Amendment to the Renewable Energy Law of the People's Republic of China", which came into effect on April 1, 2010. The "Articles 13, 14, 19, and 20" of the amendment respectively "solve the problem of grid connection difficulties for renewable energy power generation enterprises and the full purchase of renewable energy power in accordance with the law; stipulate different grid-connected electricity prices to ensure that investors in renewable energy power generation can obtain relatively stable and reasonable returns; stipulate the allocation method of additional costs of renewable energy power generation, and continuously improve the survival and competitiveness of renewable energy power generation enterprises under the premise of continuous progress in science and technology". In

September 2007, the National Development and Reform Commission issued the "Medium- and Long-Term Development Plan for Renewable Energy". The "Plan" pointed out that the government will invest about 2 trillion yuan to gradually increase the proportion of high-quality clean renewable energy in the energy structure, and strive to make the consumption of renewable energy reach about 10% of the total energy consumption by 2010 and about 15% by 2020. The plan also states that by 2010, the total capacity of solar power generation will reach 300,000 kW, and by 2020 it will reach 1.8 million kW.

The national “12th Five-Year Plan for Renewable Energy Development” is about to be released, which will be an important sign that the domestic photovoltaic market is moving towards large-scale application. According to authoritative sources, the photovoltaic power generation installed capacity target of the “12th Five-Year Plan for Renewable Energy Development” is set at 10 million kW by 2015 and 50 million kW by 2020. It is worth noting that by 2015, the scale of rooftop photovoltaic power stations will be 3 million kW, and by 2020 it will reach 25 million kW. As of 2010, the installed capacity of rooftop photovoltaic power stations was about 300,000 kW [13].

On December 19, 2009, Premier Wen Jiabao made a commitment in his speech at the Copenhagen Climate Change Leaders' Conference: By 2020, China's carbon dioxide emissions per unit of GDP will be reduced by 40%-45% compared with 2005, and the proportion of non-fossil energy in primary energy consumption will increase to about 15%. This is a solemn commitment made by the world's largest developing country to address climate change, and it shows the attitude and determination of the Chinese government as a responsible major country in addressing climate change and reducing carbon dioxide emissions.

In 2010, Huaneng Group took the lead in the domestic power generation industry to release the "Green Development Action Plan (2010-2020)", sounding the clarion call for entering the green, clean and low-carbon field. By 2020, the group company will strive to reach an installed capacity of about 2 million kW of solar power generation[14].

The power development target of the State Power Corporation during the 12th Five-Year Plan period is that new energy and renewable energy account for 30% of total installed capacity[15].

From the above data of national medium- and long-term development plans and enterprise development plans, the domestic photovoltaic market is still very large. With the continuous development of science and technology, especially photovoltaic power generation technology, the further decline of photovoltaic power generation costs and the strong support of the government, photovoltaic power generation applications are a very promising investment field.

3.2 Overseas Photovoltaic Power Generation Market [6] [11] [16]

Data source: Shengshi Huayan database

(1) Japan

The Japanese government's "Action Plan for Building a Low-Carbon Society" formulated in July 2009 proposed to increase solar power generation 10 times from 2005 by 2020 and 40 times by 2030. The action plan adopted this time has set numerical targets and schedules for achieving the "Fukuda Vision", especially the application of "Carbon Dioxide Capture and Storage Technology" (CCS) to recover carbon dioxide and store it underground by 2020, which is a solid step towards realizing a "low-carbon society".

(2) Greece

Greece passed the most favorable solar subsidy in Europe in 2009. The proposal predicts a huge installed capacity of 3GW. Once the subsidy was announced, it became one of the most promising solar markets in Europe. Greece passed the solar installation subsidy plan to promote the purchase price of solar power generation for ten years, and projects with an investment of more than 100,000 euros will receive a 40% subsidy.

(3) South Korea

In 2003, South Korea promulgated the "Law on Promoting the Development, Utilization and Popularization of New and Renewable Energy" and formulated corresponding supporting policies; in the same year, it announced and implemented the "New and Renewable Energy Technology Development and Popularization Plan", and proposed the goal of "popularizing 100,000 solar homes" from 2004 to 2012. After gaining experience in the pilot project, it will gradually improve and accelerate the promotion.

(4) United States

During his campaign, US President Barack Obama stressed the importance of renewable energy and made renewable energy one of the government's key investment areas, hoping to promote employment and revive the US economy through the development of the renewable energy industry. Obama's new energy policy clearly requires that 10% of US electricity come from renewable energy by 2012. Solar photovoltaic power generation is an important part of renewable energy. The United States recently passed the Federal Investment Tax Credit (ITC) Act, which provides government cash subsidies for 30% of solar photovoltaic power generation investment. Currently, several states in the United States, including California, New Jersey, and Nevada, have also issued the Renewable Portfolio Standard (RPS) Act to support the development of solar photovoltaic power generation. Taking California as an example, despite the impact of the financial crisis, California still made significant progress in the use of solar energy in 2008, becoming the leader in the United States in the use of this clean energy.

4. Government policy support for the development of the photovoltaic industry

4.1 Domestic related policies and regulations

At present, China's energy security is facing severe challenges, and the pressure to reduce carbon emissions is also increasing. The Chinese government has to optimize the energy structure and increase the proportion of renewable energy in the energy structure year by year; constantly formulate, amend and upgrade relevant laws, policies and measures to guide corporate investment, and increase investment in the solar energy industry in the form of treasury bonds, technical transformation loans, etc. In recent years, the relevant policies and regulations issued by the state mainly include the following.

The Renewable Energy Law of the People's Republic of China was promulgated in January 2006. On December 26, 2009, the 12th Session of the Standing Committee of the 11th National People's Congress voted to pass the Amendment to the Renewable Energy Law of the People's Republic of China, which came into effect on April 1, 2010.

In September 2007, the National Development and Reform Commission issued the "Medium- and Long-Term Development Plan for Renewable Energy". The plan pointed out that to achieve the medium- and long-term planning tasks for renewable energy by 2020, a total investment of about 2 trillion yuan will be required.

On January 12, 2009, the Chinese Academy of Sciences officially approved the implementation of the Solar Energy Action Plan at its 2009 Working Conference. The plan points out that solar energy will become an important energy source around 2050, and divides the development and utilization of solar energy into three stages.

On March 26, 2009, the Ministry of Finance issued the "Interim Measures for the Management of Financial Subsidies for Solar Photovoltaic Building Applications", deciding to conditionally subsidize some photovoltaic buildings at a maximum of RMB 20 per watt.

In June 2011, the Ministry of Finance, the Ministry of Science and Technology, and the National Energy Administration issued the "Notice on Doing a Good Job in the 2011 Golden Sun Demonstration Work."

In August 2011, the National Development and Reform Commission issued the "Notice on Improving the Policy on On-Grid Electricity Prices for Solar Photovoltaic Power Generation". The notice stated that in order to standardize the price management of solar photovoltaic power generation, a national unified benchmark on-grid electricity price will be implemented for non-bidding solar photovoltaic power generation projects.

The 2009 "Interim Measures for the Management of Financial Subsidies for Solar Photovoltaic Building Applications" aims to demonstrate and promote the application of photovoltaic technology in the construction field in rural and remote areas; the "Implementation Opinions on Accelerating the Promotion of Solar Photovoltaic Building Applications" strengthens the application of solar photovoltaic technology in the construction field; the Ministry of Housing and Urban-Rural Development and the Ministry of Finance jointly formulated the "Solar Roof Plan" to effectively promote the process of building photovoltaic integration through fixed subsidies; the "Notice on the Implementation of the Golden Sun Demonstration Project" must reflect the subsidy for grid-connected photovoltaic power generation projects; the "going to the countryside" policy for solar water heaters has increased the application rate of solar water heaters in the rural market, effectively increasing the sales of the entire industry.

In addition to the existing national solar energy industry development policies, local governments have also issued relevant strategic planning policies, such as the "Twelfth Five-Year Plan for the Development of New Energy Industry in Hebei Province" and the "Hainan Province Solar Energy Building Application Plan" (2010-2015). Relevant technical support policies, such as the "Several Policies of Shandong Province on Promoting the Accelerated Development of New Energy Industries", "Technical Regulations for the Application of Solar Water Heating Systems in Civil Buildings in Beijing", and "Nanjing City Demonstration Work Plan for the Application of Renewable Energy in Buildings". Relevant market support policies, such as the "Hainan Province Implementation of the Management Measures for the Application of Solar Water Heating Systems in Buildings" and the inclusion of the "Three Guarantees after Sales" in the solar energy industry specifications in Yunnan Province, support the development of the photovoltaic industry.

As a new energy industry, my country's photovoltaic industry has developed very rapidly with the strong support of relevant national laws, regulations and policies. However, one problem we cannot avoid is that the legal system in my country's photovoltaic industry is still incomplete and the formulation of incentive policies is still imperfect.

4.2 Relevant foreign policies and regulations[16]-[19]

The development and utilization technology and development policies of the solar energy industry in developed countries have matured and entered the stage of large-scale production. Representative countries include the United States, Germany, Japan, the United Kingdom, Israel, etc. Their corresponding practices are very meaningful for reference.

(1) United States

As the world's largest energy consumer, successive governments have identified the development of new energy as the focus of energy policy and issued a series of policies, regulations and technical market support policies. For example, in 1997, President Clinton announced the "Million Solar Rooftop Photovoltaic Plan", which means that by 2010, solar photovoltaic power generation systems will be installed on 1 million building roofs or other parts where solar energy systems can be installed. In 2009, the US federal policy "Renewable Energy Incentive Policy Investment Tax Credit Act" was introduced. Its main content is to give users of solar photovoltaic power generation and other solar-related power generation technologies (including residents and commercial enterprises) corresponding tax deductions and accelerated depreciation periods. The "Energy Policy Act of 2005" stipulates that all households that install solar energy facilities can obtain tax incentives. In 2009, Obama promoted a new energy policy focusing on solar and wind power generation, and launched a consumer stimulus plan known as the "Green Economic Revival Plan" to save the US economy.

(2) Germany

Germany is a large energy consumer with scarce resources. In order to ease its dependence on energy imports, the German government has always attached great importance to the development and utilization of the solar energy industry. In 2000, the German government promulgated the Renewable Energy Law, which legally guarantees that companies and residents should receive price subsidies when purchasing and using photovoltaic power generation energy. In 2004, the German government further amended the Renewable Energy Law, which became a boon for the rapid development of the solar photovoltaic industry. In 2009, the new Renewable Energy Heating Legislation was formulated, requiring new buildings to be combined with renewable energy systems, and consumers are more inclined to install solar energy systems.

(3) Japan

Japan was the first country to launch a solar energy development policy. Its resources are very scarce and its energy dependence is extremely high. In 1979, the Energy Conservation Law was implemented. In 1997, the Special Measures Law on Promoting the Utilization of New Energy was promulgated, which clearly put forward the guidelines for the use of new energy. The Special Measures Law on the Utilization of New Energy by Electric Power Facilities, implemented in 2003, stipulates the utilization goals of new energy electricity, which is of great significance to the development of the solar energy industry. In the same year, Japan issued the Renewable Energy Standard Law, which stipulates the proportion of renewable energy that energy companies must provide. The Kyoto Protocol came into effect in 2005, and Japan is its advocate. In 2006, Japan compiled the New National Energy Strategy to provide legal support for the implementation of various energy-saving and emission-reduction measures.

(4) United Kingdom

In 2002, the British government issued the Renewable Energy Obligation Order, which forced the increase of the proportion of renewable energy in electricity production. In the same year, the British government proposed the One Million Green Homes Plan, which supported residents to build one million green homes in 10 years through preferential policies such as value-added tax.

5 Conclusion

Whether the domestic solar photovoltaic market demand can be started on a large scale depends on the cost of photovoltaic power generation. Although the cost of solar power generation in China has entered the "one yuan era", it is still not comparable to conventional thermal power and hydropower. In the long run, whoever can master the core technology in this field will be able to take the initiative in the market. For investors, they can consider investing in grid-connected power generation projects with a certain scale in China's solar energy resource areas I and II; they can also invest in companies with strong innovation capabilities and the prospect of breakthroughs in core technologies.

In addition, the successful experience of the development of foreign photovoltaic industries can be summarized as: "effective implementation of laws and regulations, strong support for technological innovation and implementation of market support policies". In particular, the legal environment in Germany, the technical support in Japan, and the market support in the United States have effectively promoted the development of the country's photovoltaic industry. Therefore, it is recommended that the Chinese government, in light of the current development status of China's photovoltaic industry, strengthen the legal and regulatory system, improve the technical support policy system, and strengthen the market support policy system. In order to promote the better development of China's photovoltaic industry.