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China Solar Grid Parity signals unsubsidized industrial and commercial PV, rooftop solar, and feed-in tariff guarantees competing with grid electricity and coal power prices, driven by cost declines, policy reform, and technology advances.

Key Points

Point where PV in China meets or beats grid electricity, enabling unsubsidized industrial and commercial solar.

✅ City-level analysis shows cheaper PV than grid in 344 cities.

✅ 22% can beat coal power prices without subsidies.

✅ Soft-cost, permitting, and finance reforms speed uptake.

Solar power has become cheaper than grid electricity across China, a development that could boost the prospects of industrial and commercial solar, according to a new study.

Projects in every city analysed by the researchers could be built today without subsidy, at lower prices than those supplied by the grid, and around a fifth could also compete with the nation’s coal electricity prices.

They say grid parity – the “tipping point” at which solar generation costs the same as electricity from the grid – represents a key stage in the expansion of renewable energy sources.

While previous studies of nations such as Germany, where solar-plus-storage costs are already undercutting conventional power, and the US have concluded that solar could achieve grid parity by 2020 in most developed countries, some have suggested China would have to wait decades.

However, the new paper published in Nature Energy concludes a combination of technological advances, cost declines and government support has helped make grid parity a reality in Chinese today.

Despite these results, grid parity may not drive a surge in the uptake of solar, a leading analyst tells Carbon Brief.

Competitive pricing

China’s solar industry has rapidly expanded from a small, rural program in the 1990s to the largest in the world, with record 2016 solar growth underscoring the trend. It is both the biggest generator of solar power and the biggest installer of solar panels.

The installed capacity of solar panels in China in 2018 amounted to more than a third of the global total, with the country accounting for half the world’s solar additions that year.

Since 2000, the Chinese government has unveiled over 100 policies supporting the PV industry, and technological progress has helped make solar power less expensive. This has led to the cost of electricity from solar power dropping, as demonstrated in the chart below.

In their paper, Prof Jinyue Yan of Sweden’s Royal Institute of Technology and his colleagues explain that this “stunning” performance has been accelerated by government subsidies, but has also seen China overinvesting in what some describe as a clean energy's dirty secret of “redundant construction and overcapacity”. The authors write:

“Recently, the Chinese government has been trying to lead the PV industry onto a more sustainable and efficient development track by tightening incentive policies with China’s 531 New Policy.”

The researchers say the subsidy cuts under this policy in 2018 were a signal that the government wanted to make the industry less dependent on state support and shift its focus from scale to quality.

This, they say, has “brought the industry to a crossroads”, with discussions taking place in China about when solar electricity generation could achieve grid parity.

In their analysis, Yan and his team examined the prospects for building industrial and commercial solar projects without state support in 344 cities across China, attempting to gauge where or whether grid parity could be achieved.

The team estimated the total lifetime price of solar energy systems in all of these cities, taking into account net costs and profits, including project investments, electricity output and trading prices.

Besides establishing that installations in every city tested could supply cheaper electricity than the grid, they also compared solar to the price of coal-generated power. They found that 22% of the cities could build solar systems capable of producing electricity at cheaper prices than coal.

Embracing solar

Declining costs of solar technology, particularly crystalline silicon modules, mean the trend in China is also playing out around the world, with offshore wind cost declines reinforcing the shift. In May, the International Renewable Energy Agency (IRENA) said that by the beginning of next year, grid parity could become the global norm for the solar industry, and shifting price dynamics in Northern Europe illustrate the market impact.

Kingsmill Bond, an energy strategist at Carbon Tracker, says this is the first in-depth study he has seen looking at city-level solar costs in China, and is encouraged by this indication of solar becoming ever-more competitive, as seen in Germany's recent solar boost during the energy crisis. He tells Carbon Brief:

“The conclusion that industrial and commercial solar is cheaper than grid electricity means that the workshop of the world can embrace solar. Without subsidy and its distorting impacts, and driven by commercial gain.”

On the other hand, Jenny Chase, head of solar analysis at BloombergNEF, says the findings revealed by Yan and his team are “fairly old news” as the competitive price of rooftop solar in China has been known about for at least a year.

She notes that this does not mean there has been a huge accompanying rollout of industrial and commercial solar, and says this is partly because of the long-term thinking required for investment to be seen as worthwhile.

The lifetime of a PV system tends to be around two decades, whereas the average lifespan of a Chinese company is only around eight years, according to Chase. Furthermore, there is an even simpler explanation, as she explains to Carbon Brief:

“There’s also the fact that companies just can’t be bothered a lot of the time – there are roofs all over Europe where solar could probably save money, but people are not jumping to do it.”

According to Chase, a “much more exciting” development came earlier this year, when the Chinese government developed a policy for “subsidy-free solar”.

This involved guaranteeing the current coal-fired power price to solar plants for 20 years, creating what is essentially a low feed-in tariff and leading to what she describes as “a lot of nice, low-risk projects”.

As for the beneficial effects of grid parity, based on how things have played out in countries where it has already been achieved, Chase says it does not necessarily mean a significant uptake of solar power will follow:

“Grid parity solar is never as popular as subsidised solar, and ironically you don’t generally have a rush to build grid parity solar because you may as well wait until next year and get cheaper solar.”

Policy proposals

In their paper, Yan and his team lay out policy changes they think would help provide an economic incentive, in combination with grid parity, to encourage the uptake of solar power systems.

Technology costs may have fallen for smaller solar projects of the type being deployed on the rooftops of businesses, but they note that the so-called “soft costs” – including installation and maintenance – tend to be “very impactful”.

Specifically, they say aspects such as financing, land acquisition and grid accommodation, which make up over half the total cost, could be cut down:

“Labour costs are not significant [in China] because of the relatively low wages of direct labour and related installation overhead. Customer acquisition has largely been achieved in China by the mature market, with customers’ familiarity with PV systems, and with the perception that PV systems are a reliable technology. However, policymakers should consider strengthening the targeted policies on the following soft costs.”

Among the measures they suggest are new financing schemes, an effort to “streamline” the complicated procedures and taxes involved, and more geographically targeted government policies, alongside innovations like peer-to-peer energy sharing that can improve utilization.

As their analysis showed the price of solar electricity had fallen further in some cities than others, the researchers recommend targeting future subsidies at the cities that are performing less well – keeping costs to a minimum while still providing support when it is most needed.

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B.C. LNG Electrification embeds clean hydro and wind power into low-emission liquefied natural gas, cutting carbon intensity, enabling coal displacement in Asia, and opening grid-scale demand for independent power producers and ITMO-based climate accounting.

Key Points

Powering LNG with clean electricity cuts carbon intensity, displaces coal, and grows demand for B.C.'s clean power.

✅ Electric-drive LNG cuts emissions intensity by up to 80%.

✅ Creates major grid load, boosting B.C. independent power producers.

✅ Enables ITMO crediting when coal displacement is verified.

B.C. has abundant clean power – if only there was a way to ship those electrons across the sea to help coal-dependent countries reduce their emissions, and even regionally, Alberta–B.C. grid link benefits could help move surplus power domestically.

Natural gas that is liquefied using clean hydro and wind power and then exported would be, in a sense, a way of embedding B.C.’s low emission electricity in another form of energy, and, alongside the Canada–Germany clean energy pact, part of a broader export strategy.

Given the increased demand that could come from an LNG industry – especially one that moves towards greater electrification and, as the IEA net-zero electricity report notes, broader system demand – poses some potentially big opportunities for B.C.’s clean energy independent power sector, as those attending the Clean Energy Association of BC's annual at the Generate conference heard recently.

At a session on LNG electrification, delegates were told that LNG produced in B.C. with electricity could have some significant environmental benefits.

Given how much power an LNG plant that uses electric drive consumes, an electrified LNG industry could also pose some significant opportunities for independent power producers – a sector that had the wind taken out of its sails with the sanctioning of the Site C dam project.

Only one LNG plant being built in B.C. – Woodfibre LNG – will use electric drive to produce LNG, although the companies behind Kitimat LNG have changed their original design plans, and now plan to use electric drive drive as well.

Even small LNG plants that use electric drive require a lot of power.

“We’re talking about a lot of power, since it’s one of the biggest consumers you can connect to a grid,” said Sven Demmig, head of project development for Siemens.

Most LNG plants still burn natural gas to drive the liquefaction process – a choice that intersects with climate policy and electricity grids in Canada. They typically generate 0.35 tonnes of CO2e per tonne of LNG produced.

Because it will use electric drive, LNG produced by Woodfibre LNG will have an emissions intensity that is 80% less than LNG produced in the Gulf of Mexico, said Woodfibre president David Keane.

In B.C., the benchmark for GHG intensities for LNG plants has been set at 0.16 tonnes of CO2e per tonne of LNG. Above that, LNG producers would need to pay higher carbon taxes than those that are below the benchmark.

The LNG Canada plant has an intensity of 0.15 tonnes og CO2e per tonne of LNG. Woodfibre LNG will have an emissions intensity of just 0.059, thanks to electric drive.

“So we will be significantly less than any operating facility in the world,” Keane said.

Keane said Sinopec has recently estimated that it expects China’s demand for natural gas to grow by 82% by 2030.

“So China will, in fact, get its gas supply,” Keane said. “The question is: where will that supply come from?

“For every tonne of LNG that’s being produced today in the United States -- and tonne of LNG that we’re not producing in Canada -- we’re seeing about 10 million tonnes of carbon leakage every single year.”

The first Canadian company to produce LNG that ended up in China is FortisBC. Small independent operators have been buying LNG from FortisBC’s Tilbury Island plant and shipping to China in ISO containers on container ships.

David Bennett, director of communications for FortisBC, said those shipments are traced to industries in China that are, indeed, using LNG instead of coal power now.

“We know where those shipping containers are going,” he said. “They’re actually going to displace coal in factories in China.”

Verifying what the LNG is used for is important, if Canadian producers want to claim any kind of climate credit. LNG shipped to Japan or South Korea to displace nuclear power, for example, would actually result in a net increase in GHGs. But used to displace coal, the emissions reductions can be significant, since natural gas produces about half the CO2 that coal does.

The problem for LNG producers here is B.C.’s emissions reduction targets as they stand today. Even LNG produced with electricity will produce some GHGs. The fact that LNG that could dramatically reduce GHGs in other countries, if it displaces coal power, does not count in B.C.’s carbon accounting.

Under the Paris Agreement, countries agree to set their own reduction targets, and, for Canada, cleaning up Canada’s electricity remains critical to meeting climate pledges, but don’t typically get to claim any reductions that might result outside their own country.

Canada is exploring the use of Internationally Transferred Mitigation Outcomes (ITMO) under the Under the Paris Agreement to allow Canada to claim some of the GHG reductions that result in other countries, like China, through the export of Canadian LNG.

“For example, if I were producing 4 million tonnes of greenhouse gas emissions in B.C. and I was selling 100% of my LNG to China, and I can verify that they’re replacing coal…they would have a reduction of about 60 or million tonnes of greenhouse gas emissions,” Keane said.

“So if they’re buying 4 million tonnes of emissions from us, under these ITMOs, then they have net reduction of 56 million tonnes, we’d have a net increase of zero.”

But even if China and Canada agreed to such a trading arrangement, the United Nations still hasn’t decided just how the rules around ITMOs will work.

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Japan Offshore Wind Investment signals Japanese utilities entering UK offshore wind, as J-Power and Kansai Electric buy into Innogy's Triton Knoll, leveraging North Sea expertise, 9.5MW turbines, and 15-year fixed-rate contracts.

Key Points

Japanese utilities buying UK offshore wind stakes to import expertise, as J-Power and Kansai join Innogy's Triton Knoll.

✅ $900M deal: J-Power 25%, Kansai Electric ~16% in Innogy unit

✅ Triton Knoll: 860MW, up to 90 9.5MW turbines, 15-year fixed PPA

✅ Goal: Transfer North Sea expertise to develop Japan offshore wind

Two of Japan's biggest power companies will buy around 40% of a German-owned developer of offshore wind farms in the U.K., seeking to learn from Britain's lead in this sector, as highlighted by a UK offshore wind milestone this week, and bring the know-how back home.

Tokyo-based Electric Power Development, better known as J-Power, will join Osaka regional utility Kansai Electric Power in investing in a unit of Germany's Innogy.

The deal, estimated to be worth around $900 million, will give J-Power a 25% stake and Kansai Electric a roughly 16% share. It will mark the first investment in an offshore wind project by Japanese power companies, as other markets shift strategies, with Poland backing wind over nuclear signaling broader momentum.

Innogy plans to start up the 860-megawatt Triton Knoll offshore wind project -- one of the biggest of its kind in the world -- in the North Sea in 2021. The vast installation will have up to 90 9.5MW turbines and sell its output to local utilities under a 15-year fixed-rate contract.

J-Power, which supplies mainly fossil-fuel-based electricity to Japanese regional utilities, will set up a subsidiary backed by the government-run Development Bank of Japan to participate in the Innogy project. Engineers will study firsthand construction and maintenance methods.

While land-based wind turbines are proliferating worldwide, offshore wind farms have progressed mainly in Europe, though U.S. offshore wind competitiveness is improving in key markets. Installed capacity totaled more than 18,000MW at the end of 2017, which at maximum capacity can produce as much power as 18 nuclear reactors.

Japan has hardly any offshore wind farms in commercial operation, and has little in the way of engineering know-how in this field or infrastructure for linking such installations to the land power grid, with a recent Japan grid blackout analysis underscoring these challenges. But there are plans for a total of 4,000MW of offshore wind power capacity, including projects under feasibility studies.

J-Power set up a renewable energy division in June to look for opportunities to expand into wind and geothermal energy in Japan, and efforts like a Japan hydrogen energy system are emerging to support decarbonization. Kansai Electric also seeks know-how for increasing its reliance on renewable energy, even as it hurries to restart idled nuclear reactors.

They are not the only Japanese investors is in this field. In Asia, trading house Marubeni will invest in a Taiwanese venture with plans for a 600MW offshore wind farm.

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Sunrun-Tesla Virtual Power Plant Texas leverages residential solar, Tesla Powerwall battery storage, and ERCOT demand response to enhance grid resilience, cut emissions, and supply backup power via a coordinated distributed energy resources network.

Key Points

A Texas VPP using residential solar and Tesla Powerwall to aid ERCOT with grid services resilience, and less emissions.

✅ Aggregates Powerwall storage for ERCOT demand response.

✅ Enhances grid reliability with distributed energy resources.

✅ Cuts emissions by shifting solar to peak and outage periods.

In a significant development for renewable energy and grid resilience, Sunrun and Tesla have announced a groundbreaking partnership to establish a distributed power plant in Texas. This collaboration represents a major step forward in harnessing solar energy and battery storage, with advances in affordable solar batteries helping to create a more reliable and sustainable power system. The initiative aims to address the growing demand for clean energy solutions while enhancing grid stability and resilience in one of the largest and most energy-dependent states in the U.S.

The new distributed power plant, a joint venture between Sunrun, a leading residential solar provider, and Tesla, renowned for its advanced battery technology and electric vehicles, will leverage the strengths of both companies to transform how energy is generated and used. The project will deploy Tesla's Powerwall battery systems alongside Sunrun's solar panels to create a network of interconnected residential energy storage units. This network will function as a virtual power plant, aligned with emerging peer-to-peer energy sharing models that are capable of providing electricity back to the grid during periods of high demand or outages.

Texas, with its vast and growing population, has faced significant energy challenges in recent years. The state’s power grid, managed by the Electric Reliability Council of Texas (ERCOT), has experienced strain during extreme weather events and high demand periods, and instances of Texas wind curtailment during grid stress, leading to concerns about reliability and stability. The partnership between Sunrun and Tesla seeks to address these concerns by introducing a more flexible and resilient energy solution.

The distributed power plant will consist of thousands of residential solar installations, each equipped with Tesla Powerwall batteries, reflecting the broader trend of pairing storage with solar across the U.S. as it scales. These batteries store excess solar energy generated during the day and release it when needed, such as during peak demand times or power outages. By connecting these systems through advanced software, the project will create a coordinated network of distributed energy resources that can respond dynamically to fluctuations in energy supply and demand.

One of the key benefits of this distributed approach is its ability to enhance grid reliability. Traditional power plants are centralized and can be vulnerable to disruptions, whether from extreme weather, technical failures, or other issues. In contrast, a distributed power plant spreads the generation and storage capacity across numerous locations, a principle echoed by renewable power developers pursuing multi-resource projects today, reducing the risk of widespread outages and increasing the overall resilience of the power grid.

Additionally, the project will contribute to the reduction of greenhouse gas emissions. By increasing the use of solar energy and reducing reliance on fossil fuels, and amid ongoing work to improve solar and wind technologies, the distributed power plant supports Texas’s climate goals and contributes to broader efforts to combat climate change. The integration of renewable energy sources into the grid helps to decrease carbon emissions and promote a cleaner, more sustainable energy system.

The partnership between Sunrun and Tesla also underscores the growing role of technology in transforming the energy landscape. Tesla's Powerwall battery systems represent some of the most advanced energy storage technology available, and amid record solar and storage growth nationwide this decade they showcase the capability to store and manage energy efficiently. Sunrun’s expertise in residential solar installations complements this technology, creating a powerful combination that leverages the latest advancements in clean energy.

The project is expected to deliver several benefits to both individual homeowners and the broader community. Homeowners who participate in the program will have access to solar energy and battery storage at reduced costs, thanks to the economies of scale and innovative financing options provided by Sunrun and Tesla. Additionally, they will have the added security of backup power during outages, contributing to greater energy independence and resilience.

For the broader community, the distributed power plant offers a more reliable and sustainable energy system. The ability to generate and store energy at the residential level reduces the strain on traditional power plants and enhances the overall stability of the grid. Furthermore, the project will contribute to local job creation, as the installation and maintenance of solar panels and battery systems require skilled workers.

As the project moves forward, Sunrun and Tesla will work closely with local stakeholders, regulators, and utility providers to ensure the successful implementation and integration of the distributed power plant. Collaboration with these parties will be essential to addressing any regulatory, technical, or logistical challenges and ensuring that the project delivers its intended benefits.

In conclusion, the partnership between Sunrun and Tesla to create a distributed power plant in Texas represents a significant advancement in clean energy technology and grid resilience. By combining solar power with advanced battery storage, the project aims to enhance grid stability, reduce emissions, and provide reliable energy solutions for homeowners. As Texas continues to face energy challenges, this innovative initiative offers a promising model for the future of distributed energy and highlights the potential for technology-driven solutions to address pressing environmental and infrastructure issues.

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Baima Hydropower Station advances China renewable energy on the Wujiang River, a Yangtze tributary in Chongqing; a 525 MW cascade project approved by NDRC, delivering 1.76 billion kWh and improving river shipping.

Key Points

An NDRC-approved 525 MW project on Chongqing's Wujiang River, producing 1.76 billion kWh and improving navigation.

✅ 10.2 billion yuan investment; final cascade plant on Wujiang in Chongqing

✅ Expected output: 1.76 billion kWh; capacity 525 MW; NDRC approval

✅ Improves river shipping; relocation of 5,000 residents in Wulong

China plans to build a 525-MW hydropower station on the Wujiang River, a tributary of the Yangtze River, in Southwest China's Chongqing municipality, aligning with projects like the Lawa hydropower station elsewhere in the Yangtze basin.

The Baima project, the last of a cascade of hydropower stations on the section of the Wujiang River in Chongqing, has gotten the green light from the National Development and Reform Commission, China's state planning agency, even as some independent power projects elsewhere face uncertainty, such as the Siwash Creek project in British Columbia, the Chongqing Municipal Commission of Development and Reform said Monday.

The project, in Baima township of Wulong district, is expected to involve an investment of 10.2 billion yuan ($1.6 billion), as China explores compressed air generation to bolster grid flexibility, it said.

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With a power-generating capacity of 525 MW, it is expected to generate 1.76 billion kwh of electricity a year, supporting efforts to reduce coal power production nationwide, and help improve the shipping service along the Wujiang River.

More than 5,000 local residents will be relocated to make room for the project, which forms part of a broader energy mix alongside advances in nuclear energy in China.

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India spot electricity prices surged on Q3 demand, lifting power tariffs in the spot market as discoms scrambled for supply; Sembcorp SGPL boosted PLF and short-term PPA realizations, benefiting from INR per kWh peaks.

Key Points

India spot electricity prices hit Q3 records amid demand spikes, lifting tariffs and aiding Sembcorp SGPL via PLF gains.

✅ Record 10.6 cents/kWh average; 15-minute peak 20.7 cents/kWh

✅ SGPL shifted output to short-term PPA at 7.3 cents/kWh

✅ PLF ramped above 90%, cutting core losses by 30-40%

Electricity prices in India, now the third-largest electricity producer globally, bolted to a record high of 10.6 cents/kWh (INR5.1/kWh) in Q3.

A jolt in Indian spot electricity prices could save Sembcorp Industries' Indian business from further losses, even though demand has occasionally slumped in recent years, UOB Kay Hian said.

The firm said spot electricity prices in India bolted to a record high of 10.6 cents/kWh (INR5.1/kWh) in Q3 and even hit a 15-minute peak of 20.7 cents/kWh (9.9/kWh). The spike was due to a power supply crunch on higher electricity demand from power distribution companies, alongside higher imported coal volumes as domestic supplies shrank.

As an effect, Sembcorp Industries' Sembcorp Gayatri Power Limited's (SGPL) losses of $26m in Q1 and $29m in Q2 could narrow down by as much as 30-40%.

On a net basis, SGPL will recognise a significantly higher electricity tariff in 3Q17. By tactically shutting down its Unit #3 for maintenance, Unit #4 effectively had its generation contracted out at the higher short-term PPA tariff of around 7.3 cents/kWh (Rs3.5/kWh).

SGPL also capitalised on the price spike in 3Q17 as it ramped up its plant load factor (PLF) to more than 90%.

“On the back of this, coupled with the effects of reduced finance costs, we expect SGPL’s 3Q17 quarterly core loss to shrink by 30-40% from previous quarters,” UOB Kay Hian said.

Whilst electricity prices have corrected to 7.1 cents/kWh (INR3.4/kWh), the firm said it could still remain elevated on structural factors, even as coal and electricity shortages ease nationwide.

Sembcorp Industries' India operations brought in a robust performance for Q3. PLF for Thermal Powertech Corporation India Limited (TPCIL) hit 91%, whilst it reached 73% for SGPL, echoing the broader trend of thermal PLF up across the sector.

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