Off-Grid Solar in China: New Opportunities & Lessons Learned
Jan 03, 2018
Jing Pan, Communication Trainee
The world’s second largest economy, China is now at the center of the global energy transformation. As one of the leading country for solar power utility, it has been referred as the “biggest market for solar light” and the “biggest solar manufacturer” by many. The country itself has successfully reached 100% energy access in 2014. Just like in many other countries which have experienced energy poverty, it has not been an easy process. Stand-alone solar home systems stand out as the most effective solution for households living in remote rural areas.
China: A Stronghold of Solar Manufacturing
China has long been recognized as “the world factory”; it lives up to this reputation in off-grid solar as well. For years, China has remained the biggest manufacturer of solar panels and polysilicon – the smallest components of solar panels. Owing to economies of scale and more advanced supply-chain development, Chinese solar-panel manufacturers are estimated to have a 20% cost advantage over their US peers.
Most of the Chinese manufacturers are now targeting international markets, especially in India and Africa. At the moment, Indian solar companies are still largely dependent on the import of Chinese solar modules. China boasts some of the most developed online distribution channels and B2B platforms (such as Alibaba and ENF) rendering the global trade of solar products more convenient and economical.
With a large amount of emerging solar module manufacturers, quality assurance has become a particular challenge. Copycat and low-quality products are a big issue in low price segments. At the moment, quality assurance legislation for off-grid solar products is still under development – the most widely adopted standards are those from IEC, CE Marking, and Lighting Global. The Shenzhen Academy of Metrology & Quality Inspection (SMQ), which works as an associate member of Lighting Global, boasts a test lab specializing in off-grid solar module certification to ensure product quality. Recently, the government established a new Intellectual Property (IP) court in Shenzhen. It remains to be seen if increased government efforts will have a lasting effect.
However, China is much more than “cheap products” – innovations and high-quality products at competitive prices are another production trend in the region. Thinner solar panels, innovative designs and usage of solar modules are emerging. With the “Going Out” strategy, more and more companies started to specifically target international markets. GOGLA members JUA Energy and Renewit are manufacturers focusing on off-grid solutions on a global scale. “Manufacturers will add customized steps to satisfy different concerns from different countries or regions. JUA Energy currently focuses on product design and is keeping an eye on market changes and actual requirements on the ground”, Hill Ren from JUA Energy said.
GOGLA member OPES Solutions with headquarters in Hong Kong sees one innovation trend in the ‘shared economy’ - “The small solar modules are introduced into China’s mobile bicycle-sharing platforms...That has brought more than CNY 500 million turnover per year. But no one could tell the future picture because the industry is still in the status of competition disorder”, said Mick Lyv from OPES Solutions.
Off-Grid Solar Utility in Remote Rural Areas: a lesson from China
China has successfully reached 100% energy access in 2014 – all household are lighted up, even in the most remote rural areas. Off-grid solar products play an important role in addressing energy poverty in remote rural areas, such as Sinkiang, Tibet and Qinghai Province. According to Greenpeace International and UNDP, which have been working on multiple energy access projects in China together with the government, stand-alone solar home systems have been the most efficient and economical solution to address energy poverty for last mile households in the most remote rural areas. According to the indicative data provided, over 400,000 solar home systems were installed for households in remote rural areas in 2013. These systems, together with hybrid solar-wind systems, have been providing energy to schools, clinics and other infrastructure. The government also set up the Renewable Energy Development Fund to help address the maintenance of the installed SHS.
On top of that, solar powered street light plays an important role in the off-grid sector. “The majority of manufacturers cluster together around two areas, Yangtze River Delta and Pearl River Delta. And LED solar street light is the shiniest star product in the industry, which is estimated to be over 500 MW output volume and CNY 1.66 billion revenue in 2017”, said Mick Lyu, marketing director of OPES Solutions. It is estimated that the total value of Chinese solar street lighting market could be up to 60 billion RMB ($9.23 billion) by the end of 2020.
The Global Off-Grid Solar Forum & Expo, for the first time, will be held in Hong Kong, adjacent to the solar manufacturing center of Shenzhen. It is thus a unique opportunity for international off-grid solar players to meet representatives of Chinese manufacturers. As this economic giant is engaging more and more in universal energy access, it’s high time to involve China more actively in international discussions on off-grid solar.
This article is part of a series of blog posts on the off-grid solar market in Asia in the run-up to the Global Off-Grid Solar Forum and Expo (22-24 January 2017 in Hong Kong). Organized by GOGLA and Lighting Global and supported by the World Bank's ESMAP program, the Forum and Expo is the world's premier off-grid solar event bringing together more than 500 off-grid solar professionals. Read more at www.offgridsolarforum.org.