Homeowners in China are increasingly installing rooftop solar panels, which not only generate electricity but also provide protection from rain and heat. The cost for a typical installation is over 100,000 yuan, prompting many to rent their rooftops to distributors under 25-year contracts. This trend has significantly contributed to China's renewable energy goals, with solar power now accounting for 24.8% of the country's electricity capacity. Despite challenges like grid capacity limitations, the solar sector continues to expand, offering economic benefits and job opportunities.
In China homeowners are actively engaged in installing rooftop solar panels across their county. These innovative panels, mounted on sturdy steel frames, not only harness sunlight to generate electricity but also provide essential protection from rain and heat for residential homes. Solar panels also offer waterproofing and can help households earn additional income.
For homeowners, installing solar panels on a typical 100 square meter (1,076 sq ft) rooftop comes at a cost of over 100,000 yuan (approximately US$13,700). Consequently, many residents choose to rent their rooftops to distributors , who offers attractive 25-year contracts that provide 15 yuan per panel annually, along with a first-year incentive of 50 yuan per panel. This arrangement allows the owner of a 100 square meter rooftop to earn around 450 yuan each year.
Solar panel companies benefit as well, averaging about 780 yuan monthly from selling the generated electricity to grid companies, which purchase it at approximately 0.39 yuan per kilowatt-hour for local distribution.
By installing solar panels, one can earn about 30,000 yuan from solar panel companies, effectively covering his raw material costs for a 100 square meter rooftop installation. This growing trend aligns perfectly with China's ambitious renewable energy initiatives. As solar panels proliferate, they have become a familiar sight throughout the country, from sun-soaked northern regions to the more temperate south.
Currently, solar power constitutes 24.8 percent of China's total installed electricity capacity, recently surpassing wind and hydropower to claim the position of the second-largest energy source, according to China Central Television.
While centralized solar power systems, such as large solar farms, remain predominant, the rise of “distributed generation” installations on rooftops is gaining momentum. This trend, initially prominent in northern provinces like Shandong, Henan, and Hebei, has progressively expanded to southern coastal regions and even less sunny areas like Chongqing.
“Studies show that solar power is playing a positive contribution in the reduction of carbon emissions in China, and I think distributed solar panels are a part of this,” remarked Alfredo Montufar-Helu, head of the China Centre for Economics and Business at The Conference Board.
The future looks promising, as analysts predict that the demand for solar energy will continue to grow, driven by policy goals aimed at enhancing energy security and reducing emissions. Cost-effectiveness also plays a crucial role in this expansion, with advancements in technology making solar panels more affordable than ever. The payback periods for investments in solar energy through savings on electricity bills have significantly decreased.
In March, Premier Li Qiang highlighted the development of distributed energy, including solar panel systems, as a key priority in this year’s government work report. The central government’s 2021 guidelines emphasized the vast potential for clean energy development through solar installations on rooftops.
“Installing rooftop solar panels can help integrate resources, reduce peak electricity loads, and save grid costs,” the report stated, underscoring the importance of this initiative for carbon neutrality and rural revitalization.
Last year, the cumulative capacity of installed distributed solar panels reached an impressive 254,400 megawatts, reflecting a 61.4 percent year-on-year increase. Notably, the capacity of panels installed on houses surpassed 115,000 megawatts, equivalent to about five Three Gorges Dam power stations.
The solar industry’s value soared to 1.75 trillion yuan last year, employing approximately 2.46 million people, with expectations to rise to over 3.3 million next year. The recent launch of a 30 megawatt solar power project at a civil airport in Chongqing exemplifies the growing trend, expected to generate 24 million kWh of electricity annually and meet 10 percent of the airport’s power needs.
Encouraged by local government incentives, such as subsidies and tax breaks, businesses are increasingly adopting solar panels. In June, Guangdong’s provincial government announced a three-year income tax exemption for companies installing rooftop solar panels, while local governments in Sichuan, Chongqing, and Beijing have introduced additional subsidies.
According to the National Energy Administration (NEA), over 50 percent of distributed solar panels installed last year were for commercial use, with that share rising to 73.2 percent in the first three quarters of this year.
Despite these advancements, challenges remain. Analysts highlight the ongoing need for improvements in the national grid to efficiently distribute renewable energy. “China still faces challenges in providing electricity generated from renewable resources through its national grid across the entire country,” noted Montufar-Helu.
Competition among solar panel distributors has intensified due to limited grid capacity, leading to reduced profit margins. it’s impossible to install solar panels on every household due to limited grid capacity. Despite these challenges.
As China moves toward a sustainable energy future, the solar sector continues to shine brightly, illuminating new opportunities for growth and innovation.
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