1. EXPANDING THE SOLAR MANUFACTURING SUPPLY CHAIN
Presented By
Chuks. Umezulora
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2. Contents Solar PV Manufacturing Supply Chain
Sudden boom in global PV Production
The story of subsidies
China as a case study
Conclusion
Recommendation

3. Solar PV Manufacturing Supply Chain

4. Sudden boom in global PV Production

5. The Story of Subsidies
Its important to note that Solar manufacturing supply chain cannot grow exponentially without an exponential growth in solar adoption.
There seems to be a strong connection between solar adoption and government policies&incentives.
Countries like Germany, US, Japan, China, e.t.c who we see today as major players in the solar industry have at the early stages received subsidies and incentives from their government. E.g, Federal Investment Tax credit in the US which provides a tax credit of 30% for solar investment costs, subsidies to electricity generation from solar technology in the form of “feed in tariffs” (FIT),etc., and other Tax Incentives.
In the EU, nearly 100% of the new solar PV capacity since 1997 was installed in countries using FIT and nearly all countries that have growing solar PV markets have used FIT.
FIT are prices paid for solar electricity fed onto the electric grid that are independent of the cost of electricity from alternative sources

6. China as a case study
Until 2010 China’s domestic PV market has been very small due to lack of sufficient incentives in the country to promote domestic PV deployment. However, since early 2009 many incentives have been implemented in China.
In the space of 8 years (2009 – 2017), China has become a major player in the Solar Industry worldwide
Source: S. Zhang, Y. He / Renewable and Sustainable Energy Reviews 21 (2013) 393– 401)

7. Government Policies and Solar PV growth in China

8. S/N
Description
Year
Objectives 1
Brightness and Township Electrification Program
1996
Provide power to 23 Million people without access to electricity averaging 100W/person 2.
Renewable Energy Law and Relevant Policies
2005
National targets for the development of RE. signifying that the govt ensures a certain market scale and is crucial in directing Investment
Mandatory connection and purchase policy which ensures grid companies sign an agreement with renewable electricity generators in their jurisdiction to purchase all of the electricity generated from the generators, and provide grid connection services
An on-grid electricity price for renewables, which pays renewable electricity generators a fixed, additional amount for each kilo-watt of electricity generated, above the wholesale electricity price for desulfurized coal-fired power
4. Cost sharing mechanism where the cost of renewable energy generation and grid connection is divided amongst utilities and electricity end users
Renewable Energy Development Special Fund, which offers additional financial support for activities such as science and technology research for renewables, standard setting, pilot objects, rural utilization of renewables, and the renewable resource assessments 3
The Rooftop Subsidy Program and Golden Sun Demonstration Program
2009
Upfront subsidy for rooftop systems (RMB 15/W) and BIPV (RMB 20/W)
Expenses is covered by the Renewable Energy Development Special Fund
Subsidy of 50% of the bidding price for the supply of critical components such as grid-connected PV Converters, PV Module, lead acid storage battery
Applicable for PV projects not less than 50kW 4
Solar PV Concession Program
Public tender for solar power projects with the first public bidding for a 10MW PV project
Approved on-grid price of RMB 1.09/kWh 5
The National FIT Scheme
2011
1. Implemented by National Development and Reform Commission (NDRC), this scheme was aimed at boosting China’s energy portfolio and to increase the share of solar power in China’s energy portfolio 6
The 12th Five Year Plan for Renewable Energy Development
2012
1. Aimed at increasing solar power capacity and generation during the 12th FYP period at 21 GW and 25 GW 7
Free Grid-Connection Services by the State Grid Corporation of China (SGCC)
Targeted to support the domestic Solar PV industry and accomplishment of the 12th FYP, China’s largest state owned power utility company (SGCC) announced free connection services for distributed solar PV electricity producers that are located close to customers with installed capacities of less than 6 MW.
Services covered technological assistance, equipment testing, integration plan development, among others

9. Conclusion
S/N
Description
Objectives 1
Incentives should be sufficient to drive predictable demand
Incentives need to be substantial enough to affect fundamental market transformation
Enough to drive solar PV technology costs down 2.
Incentives should be stable and predictable
Policy stability is critical to creating sustained solar PV market growth
Policy must be in place for a long enough period of time to attract investments in manufacturing and the development of a mature industry
The “rules of the game” need to be clearly and believably established such that any changes or alterations in the policy can be understood and anticipated ahead of time 3
Incentives should be transparent and streamlined
Policies should be clearly defined and simple to understand, to allow a broad range of market participants (including individuals) to easily assess risks and make investment decisions 4
Sunset Mechanism
Solar PV incentives should be structured with a transition to grid parity in mind
The sudden global solar PV acceptance, growth and expansion is not “rocket science”.
Countries who have experienced huge solar PV growth has at some point received subsidies and incentives from their government.
The government is a major driver in the expansion of the Solar PV Manufacturing Supply chain
According to PV group, successful solar PV incentives have the following characteristics (See table)

10. Policy Recommendation
The government should introduce subsidies and incentives aimed at expanding the solar PV manufacturing supply chain
Introduce an effective national FIT Scheme
Learn from the best practices in the world
Draw lessons from the solar PV growth in China
Improved synergy between Government agencies and Stakeholders in driving nationwide solar PV acceptance, quality control checks, and more Foreign Direct Investments (FDI)

11. Thank You