Policy Recommendations for Distributed Solar PV Aiming for a Carbon-Neutral Future

Abstract

Distributed-solar-photovoltaic (PV) generation is a key component of a new energy system aimed at carbon peaking and carbon neutrality. This paper establishes a policy-analysis framework for distributed-solar-PV generation based on a technical- and economic-evaluation model. Given that the resource endowment is becoming lower and the raw material costs are becoming higher, the profitability of the deployment of distributed-solar-PV-generation projects in China is generally becoming much worse. Some distributed-PV-generation projects are even becoming unprofitable. This will not be helpful for the sustainable development of distributed-PV generation, which will play a vital role in attaining the goal of carbon neutrality. Based on the established model for techno-economic evaluation, a systematic policy analysis is performed to identify the effect of possible policy instruments such as financial policies on improving the economic profitability of distributed-PV-development in China. The results indicate that policy instruments related to preferential financing, green certificate, tax incentives and combinations thereof are available for priority measures aimed at optimizing incentive policies for enhancing the economic viability of distributed-PV deployment in China. Based on these findings, recommendations are proposed to optimize the currently available policy instruments for accelerating the sustainable development of the distributed-PV industry towards a carbon-neutral future.