Recently, the photovoltaic (PV) industry has been introduced to new policies. According to a joint release by the National Development and Reform Commission and the National Energy Administration, the Notice on Deepening the Market-oriented Reform of New Energy Grid Pricing to Promote High-Quality Development of New Energy outlines plans to encourage new energy grid power to participate in market transactions. The pricing will be established through market mechanisms, and a sustainable pricing settlement mechanism for new energy will be implemented. This policy has sparked significant interest within the industry.
Wang Yingge, Vice President of Goodwe Technology Co., Ltd., mentioned in an interview with China Energy News that while PV may not currently dominate the energy sector, it is on a trajectory toward becoming a key player. He explained, “Even traditional coal power has not fully engaged in market trading, while new energy is set to start trading. This indicates that photovoltaic energy will play an increasingly important role. We need to thoughtfully consider the new direction of the industry.”
Integration of Energy Storage and PV has become a significant trend as distributed PV systems join the power trading market. “Due to the nature of distributed PV, which is dependent on sunlight, power generation can be unstable. Energy storage systems can store electricity when sunlight is abundant and release it during periods of low light, ensuring a stable power supply. Additionally, combining distributed PV with energy storage increases energy self-sufficiency, reduces reliance on the grid, and enhances electricity reliability, allowing power supply to continue even during grid failures,” Wang elaborated.
Previously, commercial and industrial energy storage projects largely operated independently, with PV and energy storage managed by different entities. This lack of synergy meant that during times of low feed-in tariffs, there was no effective way to utilize stored energy. Under the new policy, energy storage is set to become a crucial tool for adjusting electricity prices and enhancing the profitability of PV projects, according to Wang.
The requirement that a portion of new energy must participate in market transactions presents new opportunities for virtual power plant technologies. “Virtual power plants need to aggregate different energy sources for trading, and relying on a single entity for transactions can hinder profitability. The participation of new energy in market trading creates conditions for making virtual power plants a reality,” Wang noted. However, he acknowledged the challenges ahead, particularly regarding the stability of electricity loads and the complexity of managing diverse energy sources through a comprehensive management system and smart energy management platform.
Goodwe has already established several demonstration projects due to its technological expertise in grid systems, internet applications, and power electronics. The company continues to enhance its AI algorithms to strengthen its core competitiveness and has been investing in the smart energy sector since 2021. Wang explained, “While Goodwe does not directly engage in virtual power plant operations, we provide services and solutions for them. We offer hardware support through our inverters, energy storage solutions, and heat pump products, along with EPC capabilities.”
Competitive Landscape
Wang believes that post-policy, the PV and energy storage industry must focus on further cost reduction to ensure profitability. “With the marketization of PV power, declining electricity prices are a significant trend. Spot trading prices are currently very low, and even with medium- and long-term price mechanisms, they won’t rise significantly. There is critical potential to compress costs in intermediary channels, where excessive channels and high development costs are pressing industry issues that need to be addressed. This will drive channel transformation and promote the emergence of quality enterprises while forcing less competitive companies to exit the residential market,” he stated.
From an inverter perspective, Wang acknowledged that although current efficiency levels are high, ongoing improvements are essential. “It’s also vital to focus on the long-term reliability of products, which can significantly reduce the levelized cost of electricity over the complete lifecycle of a power station. For instance, our GT series 100-125 kW commercial inverters are highly efficient and reliable, widely used in demanding environments such as nuclear power plants and gas stations.”
Wang added, “However, grid-tied inverters have matured over the past decade, limiting further cost reduction opportunities. The next focus for cost reduction may lie in the energy storage sector. When integrating PV with energy storage, it becomes clear that storage represents a significant portion of the system. Therefore, the core of future cost reduction in PV and storage integration should revolve around advancements in energy storage technology and reducing storage costs, while ensuring the long-term reliability of the equipment.”
Currently, the typical warranty period for inverters is five years. Wang noted that, following trends in the home appliance industry, future warranty expectations will likely increase, with a demand for more durable and reliable equipment. Safety assessments for energy storage products are more stringent, necessitating stable and secure operation, which raises technical requirements. “Ensuring low failure rates and long-term reliable operation increases actual utilization hours, effectively lowering costs. Conversely, frequent issues can lead to higher costs and necessitate equipment replacement and maintenance,” he explained.
Future Development: “Source-Grid-Load-Storage-Intelligence” Integration
Looking ahead, Wang envisions a future where the development direction incorporates “Source-Grid-Load-Storage” along with “Intelligence,” referred to as “Source-Grid-Load-Storage-Intelligence.” Provinces such as Shandong and Henan have already released policies encouraging coordinated development of storage and source-grid-load systems. Goodwe has made early investments in integrated solutions for source-grid-load-storage.
Over the past decade, Goodwe has maintained a leading position in distributed inverter shipments, totaling over 100 GW. The company’s “China Red, Photovoltaic Core” products have reached numerous households, and its range of energy storage products spans residential, commercial, and large-scale applications. Goodwe’s photonic building materials are expected to capture a leading market share this year, while its subsidiary, Yude, is capable of delivering turnkey projects in the residential and commercial PV sectors. The Goodwe heat pump, particularly in Europe, has gained significant popularity. Furthermore, the company’s smart energy management platform has integrated over 3 GW of distributed energy, providing management solutions for local energy investment firms.
Wang pointed out that while the PV industry is rife with technological innovations, truly revolutionary and disruptive technologies that can lead the entire industry are still rare. “It may seem that everyone is innovating, but there is a lack of original technical innovation. The industry needs to settle down and focus on in-depth advancements in photovoltaic, energy storage, and smart energy technologies,” he concluded. “Policies should encourage technical guidance, streamline grid connection processes, and reduce external costs, establish technical standards, and incentivize enterprises to increase R&D investments to master core technologies and prevent the phenomenon of ‘bad money driving out good money.’”
