Recently, the National Energy Administration released data on photovoltaic (PV) power construction for the first half of 2024. As of June 30, 2024, China added 102.48 million kilowatts of new PV installations, an increase of 24.057 million kilowatts compared to the 78.423 million kilowatts added in the first half of 2023, representing a year-on-year growth rate of 30.67%.
The breakdown shows that 49.6 million kilowatts of new centralized PV installations and 52.88 million kilowatts of new distributed PV installations were added in the first half of the year, with distributed PV capacity again surpassing centralized PV. Excluding the 15.85 million kilowatts of new residential PV, the new commercial and industrial distributed PV capacity was 37.03 million kilowatts. Compared to the same period last year, when the residential share was 52.54% and the commercial and industrial share was 47.46%, this year saw explosive growth in commercial and industrial distributed installations.
The slowdown in residential PV growth in the first half of the year was mainly due to the "stall" in major residential PV provinces. Jiangsu, Anhui, and Shandong were the top three provinces for new residential installations in the first half of the year, adding 5.052 million kilowatts, 1.923 million kilowatts, and 1.382 million kilowatts, respectively.
Compared to the same period last year, we noticed that in nine provinces—Anhui, Shandong, Hebei, Shanxi, Henan, Fujian, Jiangxi, Hubei, and Hunan—residential PV installations declined significantly, except for Jiangsu, Shaanxi, Liaoning, Zhejiang, Guangdong, and Inner Mongolia. Henan saw the fastest and largest reduction in new residential installations.
The deeper reasons for the decline in new residential PV installations in the first half of 2024 lie in the imbalance of regional development in residential PV. In areas like Shandong, Hebei, and Henan, the grid capacity for residential PV is overloaded, limiting grid connectivity. Another reason could be the depletion of high-quality customer resources in these areas.
The cooling of the residential PV market is not related to the market itself. With the backdrop of price reductions across the entire industry chain, the bidding price of PV modules by central and state-owned enterprises has dropped to 0.80 yuan per watt, and the comprehensive investment cost of residential PV power stations is about 1.9 yuan per watt, improving the economic viability of investing in PV power stations. The enthusiasm for installations in the market remains high.
However, since the first half of 2023, grid connection difficulties have affected more than ten provinces nationwide, with nearly 400 counties experiencing red zones of low-voltage capacity. Many regions have temporarily halted the filing of distributed PV projects. The issues of filing and grid connection for residential PV have become roadblocks inhibiting terminal installation demand.
According to public information, 37 counties in Guangdong face absorption difficulties, 73 counties in Shanxi have no distributed absorption capacity, more than 70 county-level administrative regions in Henan are in the red zone, more than 20 counties in Liaoning are in the red zone, 81 county-level units in Heilongjiang are in the red zone and have suspended distributed access, 37 counties in Shandong have no absorption capacity, 4 pilot counties in Fujian have no available capacity, and 53 counties in the Southern Grid of Hebei have no absorption capacity.
From the above information, it is evident that grid connection issues have affected residential PV installation in major provinces like Shandong, Hebei, Henan, and Fujian, directly leading to a sharp decline in installation volume in these provinces, regions, and cities in the first half of the year.
Currently, with unresolved issues such as difficulties in filing and grid connection, it is challenging for the residential PV market to improve in the second half of the year. Given the current industry situation, it is expected that the 43.483 million kilowatts installation volume will become a phased high point for the residential market, unlikely to be surpassed within the year. Theoretically, after three consecutive years of rapid growth, the residential PV market needs a short-term adjustment period as a necessary step in its spiral upward process. During this adjustment period, we need to take time to buffer and resolve the problems accumulated during rapid development.
For example, residential PV manufacturers, distributors, and agents can innovate business models and explore more application scenarios. Functional departments can delve deeper into solving issues related to absorption, filing, and grid connection, accelerate the implementation of rural grid renovation projects, comprehensively improve the carrying capacity of rural power grids, and explore more solutions to promote absorption.
As of the first half of 2024, China's cumulative residential PV installation capacity was 131.84 million kilowatts, or 131.84 GW. With the potential residential PV market installation capacity estimated to reach 1000 GW, equivalent to the installed capacity of 46 Three Gorges Dams, there is a potential incremental space of 868 GW, indicating enormous growth potential with a growth space of 7.5 times.
Source：Grassroots PV，abridged