The narrative surrounding distributed photovoltaic (PV) power generation has shifted dramatically in recent years amid robust national policies and local government supportThis renewable energy development model has transformed from a fledgling phase characterized by small-scale implementations and high costs to a thriving sector marked by rapidly declining costs and innovative development strategiesAs of 2024, the installed capacity of distributed PV generation has reached an impressive level, rivaling that of centralized PV systems, positioning it as a cornerstone of renewable energy utilization in China.

However, with this rapid expansion comes a new set of challenges, including instances of poorly regulated construction and inadequate energy absorption capabilitiesIn light of these emerging obstacles, policymakers have launched initiatives aimed at standardizing the development and management of distributed PV projects to foster healthy and sustainable growth within the industryThe revision of management regulations for distributed PV production, a process that has attracted significant industry attention and lasted nearly two years, has now reached its final stagesThis marks the beginning of a new era for high-quality development in distributed PV generation.

In the city of Tianchang, located in Anhui Province, the Xinbo Photovoltaic Material Co., Ltd. stands as a model of successOver 60,000 solar panels blanket the roof of the facility, continuously converting sunlight into green electricityAccording to Tang Kaijian, the company's director, "Our generated electricity prioritizes factory usage, with the surplus sold to the gridLast year, we produced over 26.93 million kWh of electricity, saving us more than 21.5 million yuan in electricity costs." This local success story is indicative of a broader trend within the region, evidenced by a remarkable increase of over 80% in installed capacity for distributed PV systems projected for 2024.

Chen Yulin, Deputy Director of the Marketing Department at the State Grid's Tianchang Power Supply Company, highlights this acceleration in distributed PV development, indicating that the company has assembled a team of PV service experts

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This team conducts regular inspections of equipment and analyzes power generation data to optimize operation and maintenance, ensuring that projects are effectively installed, utilized, and yield stable returns.

Distributed photovoltaic systems are defined as solar energy generation facilities developed on the user's side, connected to the distribution network, and consumed locallyFamiliar examples include residential rooftop solar installations and industrial roof-mounted systemsThe key advantages of distributed PV over large-scale centralized systems are flexibility, efficiency, and environmental friendlinessBy generating electricity on-site, it minimizes energy losses associated with long-distance transmission and maximizes energy utilizationAdditionally, these systems can be easily installed across various building types, turning unused spaces into productive energy sources.

Policy initiatives have been fundamental in transitioning distributed PV from nonexistence to a substantial contributor in the energy landscapeBy the end of 2024, the cumulative installed capacity of distributed PV will reach 370 million kW, representing a staggering 121-fold increase from figures in 2013—accounting for 11% of China's total generation capacityIn terms of newly installed capacity in 2024 alone, distributed PV will add 120 million kW to the grid, constituting 43% of that year's total new solar installationsThe energy produced from distributed sources is expected to hit 346.2 billion kWh, making up 41% of the total solar generationIt is evident that distributed PV has emerged as a pivotal force in the energy transition.

"Distributed PV now accounts for over 40% of the country's solar generation capacity, establishing itself as a vital component of the energy landscape," stated Zhang Yiguo, Deputy Director of the Hydropower and Water Conservancy Planning and Design Institute. "With land resources becoming increasingly scarce, the upward trend in the proportion of distributed PV projects is undeniable." This acknowledgment by industry experts further emphasizes the urgency to institutionalize best practices and streamline management frameworks in accordance with the evolving landscape of distributed PV generation.

The rapid escalation in scale of distributed photovoltaic systems requires a corresponding evolution of management practices

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Jiang Shihong, Vice President of the Electric Power Planning and Design Institute, explains that the complexity of managing diverse project scenarios hinges on clear delineation of responsibilitiesAmbiguity surrounding project ownership and accountability may lead to inefficiencies in approval processes and subsequent operation and maintenance phasesFurthermore, in regions experiencing high growth rates of distributed PV capacity, discrepancies between existing grid infrastructure and the needs for integration highlight the need for enhanced grid capacity to accommodate local energy absorption.

In response to these challenges, the National Energy Administration has adopted a problem-oriented approach to refine the development frameworks for distributed photovoltaic projectsThis new directive has clarified project registration processes, outlining responsibilities among various stakeholders and emphasizing the principle of "who invests is who registers" for different project typesFor projects led by non-individual investors, registrations must not be filed under an individual's name, thus safeguarding the rights of users, particularly rural householdsIn terms of construction management, project investors are tasked with due diligence regarding site selection and grid connection applications.

The recent regulatory updates have further expanded the options available for large-scale commercial distributed PV installations, enhancing their flexibility and potential market dynamismA significant shift from the original draft invites large commercial PV projects to participate in real-time electricity markets under specific conditions, enabling them to channel excess electricity back to the gridAs China actively promotes comprehensive integration of electricity markets, these modifications alleviate concerns for developers regarding user consumption fluctuations, thereby stimulating market vitality.

According to Zhang Yiguo, these new policies not only diversify the types of developments permitted under distributed PV but also increase individual project scales, reflecting a more targeted management approach to keep pace with rapid growth in development demands.

The role of the electric grid in facilitating distributed PV integration cannot be overstated

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Recent reports from multiple provinces highlight frequent inadequacies in grid capacity to accommodate the influx of distributed PV systemsThe implementation of stop-orders for registration and grid connection applications in areas marked as overloaded has hindered the market for distributed photovoltaic power generation.

Timely communication and preemptive measures are essentialNew regulations stress the importance of ensuring that local energy authorities and grid operators clearly understand the requirements for grid capacityA quarterly released and prewarning mechanism will be established to guide the scientific layout of distributed PV projects based on factors such as system load levels and equipment capacityInvestors developing distributed projects must take the grid's capacity and acceptance ability into careful consideration as part of their project planning processes.

To address prior challenges of lack of visibility and control over distributed generation, substantial reforms are underway to ensure that distributed PV installations can operate in a manner that is observable, measurable, adjustable, and controllable (referred to as the "Four Kinds"). During significant holidays, when electricity demand drops drastically, there can be scenarios where distributed PV generation remains high, leading to imbalances in supply and demandThus, there is a pressing need for improvements in the "Four Kinds" capabilities of distributed generation systems.

In an inaugural pilot project during the 2024 National Day holiday, Zhejiang's Haining was the backdrop for the first structured transaction of distributed renewables aimed at ensuring safety and promoting absorptionBy securing PV resources ahead of holidays, the initiative can effectively allocate energy during periods of significant dips in regional load, ensuring a balance between generation and consumption.

"During holidays like the Spring Festival and National Day, most companies shut down

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