Solar now cheaper than coal in cities across China

Signal of change / Solar now cheaper than coal in cities across China

By Anna Simpson / 06 Sep 2019

A study published in Nature Energy finds that 344 prefecture-level Chinese cities can achieve solar PV electricity prices lower than grid-supplied prices, without subsidies. 


Reaching grid parity – the point at which solar generation costs the same as electricity from the grid – represents a key stage in the expansion of renewable energy sources. The report authors attribute this milestone for China to a combination of technological advances, cost declines and government support, with 100 policies supporting the PV industry since the year 2000. However, in 2018, they explain, China cut subsidies to make the industry less dependent on state support and shift its focus from scale to quality.

So what?

  Currently, solar PV only makes up 7.3% of China's energy mix, with coal at 55.2%. Will grid parity for solar PV cause a surge in its development across China? Not necessarily, Jenny Chase, head of solar analysis at BloombergNEF, told Carbon Brief. There can be a dearth of long-term thinking among Chinese companies to fuel investment, Chase explains, as the lifespan of these companies is typically only eight years, whereas solar PV installations last a couple of decades.      The report authors say solar development could be encouraged by cutting other significant 'soft' costs, such as financing, land acquisition and grid accommodation.    China is emerging as a world leader in renewable energy development and capacity. However, gains in China's renewable energy capacity should also be assessed against its expansion of coal overseas. Reducing emissions at home will not have a net positive impact on carbon emissions globally if it is outweighed by investment in new coal developments elsewhere.          Signal spotted by Charlie Thorneycroft.


What might the implications of this be? What related signals of change have you seen?

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