Photovoltaic Power Generation Industry: Entering a New Stage with Distributed Photovoltaic Power as the Main Development Direction
Introduction: As the photovoltaic power generation industry rapidly evolves, with continuous technological innovations and improvements in the research and production capabilities of core components, China’s photovoltaic power generation has gradually entered a new phase of grid parity. The installed capacity has seen significant growth, consistently reaching new historical highs. In 2024, China’s newly installed photovoltaic capacity was 277.17 GW, a year-on-year increase of 28%. The cumulative installed capacity reached 885.7 GW, representing a year-on-year growth of 45.32%. Benefiting from policy support, advancements in photovoltaic technology, and increasing demand, the newly installed capacity of distributed photovoltaics has rapidly expanded, establishing itself as a crucial force in the energy transition. It is expected that in the future, distributed photovoltaic power generation will be widely applied in households, industries, and public facilities, becoming the primary direction for the development of photovoltaic power generation. Meanwhile, the “curtailment of solar power” issue, arising from the volatility of photovoltaic generation, is becoming increasingly prominent, making the use of energy storage systems a critical factor for the large-scale application of photovoltaics and the transformation of the energy structure.
1. Industry Definitions and Classifications: Photovoltaic power generation is a technology that directly converts light energy into electrical energy through the photovoltaic effect at semiconductor interfaces. It mainly consists of three components: solar panels (modules), controllers, and inverters, with the main parts composed of electronic components. When solar cells are connected in series and encapsulated for protection, they form large-area solar panel modules. When paired with power controllers and other components, they create a photovoltaic power generation system. According to the report published by the Guanyan Research Network, photovoltaic power generation is primarily categorized into three types: centralized photovoltaic power generation, distributed photovoltaic power generation, and Building-Integrated Photovoltaics (BIPV). Each of these systems has its advantages and is suitable for different scenarios and needs. Among them, distributed photovoltaic power generation, characterized by “on-site development and nearby utilization,” has rapidly developed and has become an indispensable part of China’s power supply system, now comparable to the development of centralized photovoltaic power plants.
2. Industry Has Entered a New Stage of Grid Parity, with Significant Growth in Installed Capacity: In recent years, the rapid development of the photovoltaic power generation industry, continuous technological innovations, and intensified competition along the value chain have led to improvements in the research and production capabilities of core components like photovoltaic modules and inverters, resulting in decreased costs for new photovoltaic projects. For instance, the total production cost of polysilicon has fallen below 60 RMB/kg, with leading companies reducing it to below 50 RMB/kg. By 2019, the cost of monocrystalline PERC modules dropped to approximately 1.31 RMB/W, while the initial total investment cost of photovoltaic power generation systems decreased to around 4.55 RMB/W, leading to a cost of electricity ranging from 0.28 to 0.50 RMB/kWh. In 2020, the initial total investment cost of photovoltaic power generation systems was expected to decline to about 4.30 RMB/W. By 2024, the cost of electricity for photovoltaic power in China had dropped to between 0.15 and 0.24 RMB/kWh. This indicates that China’s photovoltaic power generation has gradually entered a new stage of grid parity, transitioning from a subsidy-supported development model to market-oriented growth.
Driven by national policies, technological advancements, decreasing costs, and an expansion of application fields, China’s photovoltaic power market has rapidly developed, with installed capacity achieving significant growth and setting new historical records. According to data, in 2024, China’s newly installed photovoltaic capacity was 277.17 GW, a year-on-year increase of 28%, with a cumulative installed capacity of 885.7 GW, a 45.32% year-on-year growth, once again setting a historical high. It is anticipated that with the promotion of the national “carbon peak and carbon neutrality” initiative and further reductions in photovoltaic power generation costs, the industry will continue to experience rapid growth.
3. Distributed Photovoltaic Power Generation Has Become the Main Direction of Development: Distributed photovoltaic power generation refers to facilities built near user sites, characterized by self-consumption and the export of surplus electricity, while balancing adjustments within the distribution system. This method of power generation is a new and promising approach to electricity generation and energy utilization, advocating for local generation, nearby grid access, and immediate usage. It effectively utilizes local solar resources and reduces reliance on fossil fuels, not only improving the output of photovoltaic stations of the same scale but also addressing losses that occur during voltage boosting and long-distance transmission. It is expected that in the future, distributed photovoltaics will be widely used in households, industries, and public facilities, becoming a key force in promoting the transformation of the energy structure.
In recent years, benefiting from policy support, advancements in photovoltaic technology, and growing demand, the newly installed capacity of distributed photovoltaics has rapidly increased. As of the end of 2024, the cumulative installed capacity of distributed photovoltaic power generation reached an impressive 374.78 GW, which is 121 times the capacity at the end of 2013. This not only accounts for 42% of the total installed capacity of photovoltaic power generation but also represents 11% of the total installed capacity of electricity generation nationwide. In 2024, the newly installed capacity of distributed photovoltaic power generation reached 118.18 GW, making up 43% of the total newly installed photovoltaic capacity that year. Additionally, the distributed photovoltaic power generation output reached 3,462 billion kWh in 2024, accounting for 41% of the total photovoltaic generation. These figures indicate that distributed photovoltaic power generation has become an indispensable part of China’s power supply system, playing a significant role in promoting the widespread use of clean energy and achieving carbon neutrality goals.
4. “Solar-Storage Integration” Becomes an Industry Development Trend: “Solar-storage integration” refers to the addition of energy storage inverters, batteries, and other storage system devices in photovoltaic power systems, effectively addressing the intermittent and volatile nature of photovoltaic generation and the low controllability of energy supply. This integration resolves the contradiction between the continuity of generation and the intermittency of electricity usage, ensuring stable operations across generation, grid, and user sides. As the installed capacity of photovoltaics continues to grow rapidly, the “curtailment of solar power” issue—arising from the inherent fluctuations of photovoltaic generation—has become increasingly prominent. Thus, the application of energy storage systems is expected to be a key element in the large-scale deployment of photovoltaics and the transformation of the energy structure.
In recent years, China’s electrochemical energy storage industry has seen rapid growth in cumulative installed capacity. By the end of 2023, the cumulative installed capacity of domestic electrochemical energy storage reached 25,005 MW/50,864 MWh. It is projected that by 2024, this capacity will rise to approximately 27,554 MW/56,216 MWh. Among these, lithium-ion batteries continue to dominate the application of operational electrochemical storage technologies. As of the end of 2023, the total energy of operational lithium-ion battery projects reached 48.77 GWh, accounting for 95.89%, followed by lead-acid/lead-carbon batteries and flow batteries at 2.26% and 1.02% respectively.
