In 2017, the distributed photovoltaics sector experienced a significant revival, fueled by supportive government policies that reignited interest in the industry. As we moved into 2018, the question arose: would this rapid growth lead to overcapacity? With the market accelerating, companies had to rethink their strategies to stay competitive.
The year 2017 marked a turning point for China’s distributed photovoltaics. A series of favorable policies were introduced, laying a strong foundation for the sector's expansion. The surge in distributed PV installations became one of the most notable highlights in the history of solar energy development in the country.
According to data from the National Energy Administration, China’s photovoltaic capacity continued to grow rapidly throughout 2017. By November, the total output reached over 100 billion kilowatt-hours, with centralized PV accounting for 93.2 billion kWh and distributed PV reaching 13.7 billion kWh. This demonstrated the explosive growth of distributed systems, which became a key driver of overall demand.
By 2017, China's distributed PV capacity exceeded expectations, and the rate of solar curtailment dropped significantly. These factors contributed to a historic peak in distributed PV generation. While industrial and commercial distributed systems had been around for years, the household segment only gained traction in 2017.
The reduction in both costs and subsidies created new opportunities, allowing the market to expand and attract more players. Although global investment in solar remained steady, the growth rate slowed. However, the distributed market offered a fresh wave of momentum for the industry.
Experts estimate that the household PV market alone could reach 180 GW in cities and towns. When combined with industrial and commercial installations, the potential market size becomes even more impressive. In the future, distributed PV will no longer be limited to rooftops—carports, barren land, ponds, farmlands, and greenhouses could all become sites for solar panels, leading to more diverse applications.
Despite its strong growth, the 2017 expansion of distributed PV was not the fastest, but it represented a powerful comeback after years of development. Industry experts attribute this growth to several factors, including the decline in ground-mounted solar projects in 2016, which pushed many intermediaries toward the distributed market. Additionally, stable subsidies in 2016 helped increase profits for the sector.
The “13th Five-Year Plan for Solar Energy Development†set a target of 110 million kW of installed solar capacity by 2020, with 60 million kW coming from distributed systems. In late 2017, new regulations were issued to promote market-based trading for distributed power generation, signaling further policy support for the sector.
Industry insiders emphasize that technological innovation and smart market strategies are crucial for long-term success. Alongside government support, companies must improve their strategies, channel networks, and project quality. However, challenges remain, such as lack of standardization and slow grid upgrades, which can hinder the recognition of distributed assets.
Wang Shujuan, an energy expert at the China Investment Association, noted that the household market is currently fragmented, with no clear leader. While distributed installations have a small impact on the grid now, the expected 20 GW of new capacity in 2018 could bring issues like overcapacity and mismatched supply and demand.
Nevertheless, continuous innovation in technology and business models remains the key to industry growth. As the market becomes more regulated, companies with strong integration skills and efficient operations will thrive. The competition will intensify, driving industry consolidation and optimization.
Technological advancements continue to redefine efficiency, while regional shifts see PV development moving toward central and eastern China. Demand is also shifting toward high-efficiency products, pushing the industry to innovate faster. Under the trend of accelerated distributed PV growth, the 2018 market is expected to see over 800,000 household installations, totaling 6 GW in scale. Distributed PV remains a major keyword in the solar industry.
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