On January 23, the National Energy Administration released a policy interpretation of the "Administrative Measures for the Development and Construction of Distributed PV Power Generation," stating that the "Measures" specify detailed requirements for various stages of distributed PV project development, including preliminary preparation, agreement signing, technical requirements, procedural handling, and design and construction. Projects can only commence construction after obtaining grid connection approval from power grid enterprises and must strictly adhere to relevant regulations and standards on equipment, construction projects, and safety production to ensure project quality and safety, as well as complete acceptance work. The "Measures" outline requirements for safety production, dispatch operation, model innovation, operation and maintenance management, information management, consumption monitoring, and upgrading of distributed PV power generation projects, forming a closed-loop management system. Regarding model innovation, projects are allowed to participate in dispatch through forms such as microgrids, generation-grid-load-storage integration, and virtual power plant aggregation. Large-scale industrial and commercial distributed PV power generation projects can supply power to users via dedicated lines. Given the wide distribution, large volume, and regional disparities in development conditions of distributed PV power generation, the "Measures" propose that provincial energy authorities, in collaboration with the National Energy Administration's regional offices, may formulate implementation rules tailored to the specific conditions of their provinces (autonomous regions, municipalities).
Additionally, it mentioned that in regions with continuous operation of the electricity spot market, price signals in the electricity market can guide large-scale industrial and commercial distributed PV power generation projects to maximize self-consumption and contribute to power supply during periods of tight electricity supply by feeding surplus electricity into the grid. Therefore, the "Measures" allow large-scale industrial and commercial distributed PV projects in such regions to adopt a self-consumption with surplus electricity fed into the grid model to participate in the spot market. Furthermore, large-scale industrial and commercial distributed PV projects are permitted to transition to centralized PV power stations when there are significant changes in electricity user load, providing more flexibility.
The specific original text is as follows:
Policy Interpretation of the "Administrative Measures for the Development and Construction of Distributed PV Power Generation"
Recently, the National Energy Administration revised and issued the "Administrative Measures for the Development and Construction of Distributed PV Power Generation" (hereinafter referred to as the "Measures") to further promote the healthy and sustainable development of distributed PV power generation. The following is an interpretation of the background, guiding principles, revision principles, and main content of the "Measures."
I. Background of the Revision of the "Measures"
In 2013, the National Energy Administration issued the "Interim Measures for the Management of Distributed PV Power Generation Projects" (Guoneng Xinneng [2013] No. 433, hereinafter referred to as the "Interim Measures"), which clarified policies and requirements related to distributed PV power generation and played a positive role in promoting the rapid development of the industry. Over the past decade since the issuance of the "Interim Measures," the development landscape of the distributed PV power generation industry has undergone significant changes, making the revision work both necessary and urgent.
From the perspective of scale and capacity: In terms of cumulative installations, by the end of 2013, the nationwide cumulative grid-connected PV power generation capacity was 19.42 million kW, of which distributed PV accounted for 3.1 million kW, representing 16%. By the end of 2024, the cumulative installed capacity of distributed PV power generation is expected to reach 370 million kW, 121 times that of the end of 2013, accounting for 42% of total PV power generation capacity and 11% of total national power generation capacity. In terms of new installations, distributed PV power generation is expected to add 120 million kW in 2024, accounting for 43% of the year's new PV power generation installations. In terms of power generation, distributed PV power generation is expected to produce 346.2 billion kWh in 2024, accounting for 41% of PV power generation. Whether in cumulative installations, new installations, or power generation, the trend of distributed and centralized PV power generation developing in parallel and on equal footing is evident, with distributed PV power generation becoming a significant force in energy transition.
From the perspective of the development environment: The price of PV modules has dropped from around 5 yuan/W in 2013 to the current 0.7 yuan/W. New energy, including distributed PV power generation, has fully entered a market-oriented phase of parity without subsidies. The series of regulations established in the "Interim Measures" around fiscal subsidies, such as scale management, are no longer applicable. At the national level, mechanisms such as renewable energy electricity consumption responsibility weights and distributed PV power generation access capacity assessments for distribution networks have been gradually established to guide development. The "Measures" need to institutionalize some effective mechanisms and practices at the national and local levels and improve management in line with the times.
From the perspective of major imbalances and prominent issues: With the explosive growth of distributed PV power generation, grid connection and consumption have become the primary constraints on development, necessitating adjustments in management approaches and coordinated efforts in generation-grid-load-storage to promote the sound and rapid development of distributed PV power generation. Regarding prominent issues, as distributed PV power generation, especially household PV, continues to expand its development models, some enterprises have registered and developed projects under the names of natural persons, leading to cases where project development infringes on farmers' interests, requiring urgent regulation.
II. Guiding Principles and Revision Principles of the "Measures"
The "Measures" combine support for distributed PV development with standardized development, supporting what should be supported and adhering to what should be adhered to. It aims to promote development by addressing constraints such as insufficient grid connection and consumption capacity while regulating the market by correcting and strictly regulating unreasonable phenomena in development, enabling the industry to adapt to new situations and changes, safeguarding the legitimate rights and interests of both power producers and users, especially farmers, and promoting both quantitative and qualitative growth in distributed PV power generation.
Distributed PV power generation involves numerous points, wide coverage, multiple stakeholders, and complex interest relationships. The revision of the "Measures" adheres to the following four principles:
1. Adhering to a systematic perspective, emphasizing the essential requirement of local development and utilization of distributed PV. The fundamental distinction between distributed PV power generation and centralized power stations lies in its development on the user side and local consumption. The "Measures" emphasize this essential characteristic and requirement of distributed PV power generation in terms of definition, classification, and grid connection models, stressing the proportion of self-consumption and returning to the "original intent" and essence of distributed PV power generation.
2. Adhering to a people-first approach, effectively protecting the legitimate rights and interests of users, especially farmers. Distributed PV power generation is the form of power supply most closely connected to users. It must achieve sustainable development based on fully respecting user intentions and forming good interactions with users. The "Measures" refine requirements in all aspects, from leasing user rooftops to project registration, development, and operation, ensuring that users, especially farmers, benefit from distributed PV development, empowering rural revitalization.
3. Adhering to a problem-oriented approach, focusing on key management points. By addressing concerns such as definitions, classifications, grid connection models, and grid capacity, the "Measures" clarify and correct new issues in the industry, covering all stages of distributed PV power generation development, from project planning to registration, construction, grid connection, and operation management, with clear management priorities to ensure practical and effective governance.
4. Adhering to differentiated management to enhance operability. The "Measures" cover all forms of distributed PV power generation while maintaining clear boundaries, laying the foundation for differentiated and targeted management of different types of distributed PV power generation and supporting provincial energy authorities in formulating implementation rules based on local conditions.
III. Main Content of the "Measures"
The "Measures" consist of seven chapters, including General Provisions, Industry Management, Registration Management, Construction Management, Grid Connection, Operation Management, and Supplementary Provisions, with a total of 43 articles. It covers the definition and classification of distributed PV power generation and management requirements for all stages of the project life cycle, outlining the responsibilities of industry authorities, investors, and power grid enterprises, forming a comprehensive and standardized management system.
(1) What is distributed PV power generation? In terms of definition, it highlights three basic characteristics: development on the user side, grid connection to the distribution network, and local balancing within the distribution network system. In terms of classification, it focuses on three elements: construction site, grid connection voltage level, and installed capacity, subdividing into four types: household PV for natural persons, household PV for non-natural persons, general industrial and commercial, and large-scale industrial and commercial. In terms of grid connection models, it specifies three modes: full grid connection, full self-consumption, and self-consumption with surplus electricity fed into the grid. Natural person and non-natural person household PV can choose any of the three modes, general industrial and commercial can choose between full self-consumption and self-consumption with surplus electricity fed into the grid, and large-scale industrial and commercial are generally required to choose the full self-consumption mode, fully reflecting the differentiated management approach.
(2) How is the industry managed? At the national level, the focus is on coordinating the development needs of distributed PV power generation, promoting multi-scenario integrated applications, strengthening full-process monitoring of the industry, timely improving industry policies and standards, and building a comprehensive framework to support and regulate distributed PV development. Provincial energy authorities are responsible for aligning multiple plans, guiding local energy authorities in proposing distributed PV construction scales for their regions, and guiding power grid enterprises in making corresponding upgrade and investment plans. County-level energy authorities are tasked with specific implementation. The development of distributed PV power generation must fully respect the wishes of building and site owners, and local authorities must not use exclusive rights to operate in ways that affect the business environment.
(3) How is registration handled? The "Measures" specify that distributed PV power generation projects are subject to registration management, with the registration entity determined based on the principle of "who invests, who registers." The registration capacity is based on the capacity on the AC side, with detailed requirements for registration information, combined registration, registration changes, and record-keeping. It emphasizes that additional registration document requirements must not be imposed arbitrarily, and processing times must not be exceeded. To address the issue of distributed PV projects developed under farmers' names despite being funded by developers, leading to imbalanced rights and responsibilities and potential financial and safety risks, the "Measures" stress that "distributed PV power generation projects invested and developed by non-natural persons must not be registered under the names of natural persons," effectively protecting farmers' interests.
(4) How are projects constructed? The "Measures" specify detailed requirements for various stages of distributed PV project development, including preliminary preparation, agreement signing, technical requirements, procedural handling, and design and construction. Projects can only commence construction after obtaining grid connection approval from power grid enterprises and must strictly adhere to relevant regulations and standards on equipment, construction projects, and safety production to ensure project quality and safety, as well as complete acceptance work.
(5) How is grid connection handled? The "Measures" clarify the basic requirements for power grid enterprises and prohibited behaviors, outlining requirements for grid connection applications, acceptance and response, system design, acceptance and response, investment interface delineation, grid connection agreement signing, and grid connection commissioning. Power grid enterprises are required to establish differentiated grid connection work systems for different types of distributed PV power generation projects. Particularly regarding the grid capacity for distributed PV, power grid enterprises are required to cooperate with provincial energy authorities in conducting assessments, establish a quarterly capacity release and warning mechanism for distribution networks, and guide the scientific and reasonable layout of distributed PV power generation. While setting requirements for power grid enterprises, the "Measures" also require new projects to meet the "observable, measurable, adjustable, and controllable" criteria to enhance the grid capacity and regulation capability for distributed PV power generation.
(VI) How to Regulate Operations. The "Administrative Measures" specify requirements for safety production, dispatch operation, model innovation, operation and maintenance management, information management, consumption monitoring, and upgrading of distributed PV power generation projects, forming a closed-loop management system. In terms of model innovation, projects are allowed to participate in dispatch through forms such as microgrids, generation-grid-load-storage integration, and virtual power plant aggregation. Large-scale industrial and commercial distributed PV power generation projects can supply power to users via dedicated lines. Given the wide distribution, large quantity, and dispersed nature of distributed PV power generation, as well as the significant differences in development conditions and foundations across regions, the "Administrative Measures" propose that provincial-level energy authorities, in conjunction with the dispatched agencies of the National Energy Administration, may formulate implementation rules tailored to the actual conditions of their provinces (autonomous regions, municipalities) based on these measures.
IV. Several Issues That Need Explanation
(I) Regarding the "Distinction Between New and Existing Projects." Properly aligning new and existing policies and clarifying the "distinction between new and existing projects" is a widely shared opinion in the industry. To this end, the "Administrative Measures" state in the filing section: "Distributed PV power generation projects invested, developed, and constructed by non-natural persons shall not be filed under the name of natural persons. Projects filed under the name of natural persons before the issuance of these measures may retain their original filing entity and continue to be managed under the original project type..." Furthermore, the appendix clarifies that "these measures shall take effect from the date of issuance and remain valid for five years. The 'Interim Measures for the Management of Distributed PV Power Generation Projects' shall be repealed simultaneously. For distributed PV power generation projects filed before the issuance of these measures and connected to the grid and put into operation before May 1, 2025, the original policies shall continue to apply." A sufficient transition period is provided for projects filed before the issuance of these measures.
(II) Considerations for the Grid Connection Model of Large-Scale Industrial and Commercial Distributed PV Power Generation. In regions with continuous operation of the electricity spot market, price signals from the electricity market can guide large-scale industrial and commercial distributed PV power generation projects to maximize self-consumption and play a role in ensuring supply by feeding surplus electricity into the grid during periods of tight electricity supply. Therefore, the "Administrative Measures" allow large-scale industrial and commercial distributed PV projects in regions with continuous operation of the electricity spot market to adopt a self-consumption with surplus electricity fed into the grid model to participate in the spot market. Additionally, large-scale industrial and commercial distributed PV projects are allowed to be adjusted to centralized PV power stations when there are significant changes in electricity user load, providing more flexibility.
(III) Regarding Agri-PV, Fishery-PV, and Small Ground-Mounted Power Stations. Agri-PV, fishery-PV, and small ground-mounted power stations typically have small loads and low self-consumption, often adopting a full-grid connection model. From the perspective of power generation characteristics, this does not align with the fundamental positioning of distributed PV power generation for local development and utilization. Moreover, these projects often involve complex land use situations, inconsistent local management approaches, and certain ambiguities. Based on these considerations, Agri-PV, fishery-PV, and small ground-mounted PV power generation projects are categorized under centralized PV power station management. For relatively small-scale projects of these types, provincial-level energy authorities may prioritize them when formulating annual development and construction plans and organizing competitive allocation, simplifying project filing and related management procedures. Power grid enterprises are to cooperate in ensuring grid connection.
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