A new funding model may allow free installation of rooftop solar panels to houses and businesses, which would boost China's renewable energy target. (Photo : www.prweb.com)
China may have found a new funding model that would allow buyers to have solar panels installed for free, which is crucial for urban and suburban solar markets as the country aims to raise its green and renewable energy targets, the Shanghai Daily reported.
According to the report, China, as the world's largest producer of photovoltaic panels, has built massive solar farms, but cities and industrial hubs have not taken up solar power, falling short of official targets.
Although China is set to surpass Germany as the country with the world's highest installed solar capacity, there has been minimal growth in small-scale solar such as rooftop panels that planners did not set new targets for installations under 20 megawatts (MW) in size this year.
But through third-party financing models, which are now popular in the United States, China could gain solar potential like Germany and Japan, where rooftop panels helped to boost capacity and raise new levels of renewable energy.
"The options today in China are a lot better than they were 12 months ago," said Ross Allan, director of business administration at Dulwich College, Suzhou, an international school which is considering installing panels.
According to the report, China wants to boost solar capacity from 28 gigawatts (GW) in 2014 to 100 GW by 2020.
But households and businesses did not show interest due to high installation costs, the difficulties in getting rooftop rights, limits on leases since all land belongs to the state, and low returns for selling excess power into the grid.
According to Germany's Federal Network Agency, small-scale installations accounted for just 17 percent of China's installed solar capacity at the end of 2014, compared with at least 70 percent of capacity in Germany.
But subsidies and falling manufacturing costs helped to fund and install photovoltaic (PV) panels in small-scale projects which offer the chance to go green with little cost.
Frank Xie, senior analyst with IHS in Shanghai, said that with the help of such funding models, small-scale solar could rise to a third of total capacity in just five years.
"Third-party financing is really critical to the sustainability and the viability of the China PV market," Xie said.
Singapore-based real estate investment firm Redwood Group has recently launched a 248-kilowatt (KW) pilot project in China. The company also signed a power purchase agreement with New York-based solar developer UGE International and its financing partner, Hong-Kong's Blue Sky Energy Efficiency Co.
Under the Redwood deal, UGEI and Blue Sky would lease rooftop space from Redwood to operate solar panels and then sell the electricity back to Redwood, the building owner, at prices lower than grid rates.
"The time is right now for solar on rooftop in China because the cost of putting a system on the roof is becoming much more attractive," said Tianyu Sieh, chief executive of Blue Sky.
UGEI and Blue Sky have also partnered with real estate services firm Jones Lang LaSalle in China to offer the same model to its commercial clients.
"The benefits are going to be around avoided capital, reduced costs, or cost predictability, (and) branding benefits," Matthew Clifford, the head of Energy and Sustainability Services for North Asia at Jones Lang LaSalle, said.
"China is the latest (country) where we've got a really good business case," Clifford added.
