2025 China Distributed Solar Policy Adjustment: Key Milestones and Industry Response

As part of the global energy transition, China’s distributed solar industry is facing a significant policy adjustment in 2025. Two key policy dates, April 30 and May 31, will have a profound impact on the future development of the industry. These policy changes not only affect the commercial models but also present new strategic requirements for businesses. So, what are the policy changes that will have such a substantial effect?

According to the “Distributed Photovoltaic Power Generation Development and Construction Management Measures” issued by the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA), the notice points out that, “Commercial and industrial distributed solar projects connected to the grid before April 30 can opt for the full-grid mode, enjoying higher subsidy tariffs; however, projects connected to the grid after April 30 can only choose self-consumption or partial-grid mode and are no longer eligible for full-grid sale." This means that April 30 will be the dividing line between the old and new policies.

This policy change specifically regulates the grid access model and on-grid tariff mechanism for commercial and industrial distributed solar projects. A new round of "rush installation" has begun as companies are eager to complete project registrations and grid connections before the policy window closes in order to benefit from higher subsidy tariffs. In some regions with abundant sunlight, residential solar projects still retain the full-grid mode, but due to the new regulations, this mode will be strictly limited, prompting businesses to seize the last opportunity to push for concentrated grid connections.

However, this rush to install also brings challenges. On one hand, a large number of projects rushing to connect to the grid in a short period could put additional pressure on the grid connection, affecting efficiency. On the other hand, some businesses may neglect quality and safety standards while rushing to complete projects, potentially leaving hidden risks. Therefore, choosing experienced and reliable EPC contractors for solar projects is crucial to ensuring quality and safety standards.

On February 9, 2025, the NDRC and NEA jointly issued a notice on "Deepening the Marketization of New Energy Grid Tariffs to Promote High-Quality Development of New Energy," which strongly promotes the high-quality development of new energy. The notice emphasized that "new energy grid power will be fully market-driven." It noted that "new energy projects (including wind and solar) will generally enter the electricity market for trading. Grid electricity tariffs will be formed through market transactions. New energy projects can submit their generation volume for bidding and accept market-determined prices."

For new energy projects that are still in operation as of June 1, 2025, the grid tariffs will be determined by market forces. However, projects operating before June 1, 2025, will still benefit from the existing pricing mechanisms, which will not exceed the local coal-fired electricity price.

For new projects starting after June 1, 2025, the grid electricity volume will be determined annually according to the local renewable energy consumption responsibility, the user’s capacity to pay, and other factors. The new electricity pricing mechanism will be formed through a competitive bidding process, where projects with lower bids will be prioritized.

This policy adjustment marks a fundamental shift for the distributed solar industry. It pushes the industry from a traditional model dependent on subsidies toward a more market-oriented approach. Existing projects need to complete grid connections or adjust their operating models during the policy transition period to maximize their benefits from the existing policies. At the same time, new projects will have to compete in a completely new market environment, improving their technical capabilities and market sensitivity to adapt to the future competitive landscape.

The "full-grid" model, previously driven mainly by subsidies, is gradually phasing out, being replaced by an operation model that focuses more on actual electricity demand and market trading. This transformation is not only an adjustment to existing business models but also an overall enhancement of the industry’s competitiveness. Enterprises need to optimize their technical capabilities and operational strategies to face the challenges posed by the new pricing mechanism.

In the context of current energy policy adjustments, companies must deeply understand the policy’s implications, actively respond to the changes, adjust their strategies in a timely manner, and seize market opportunities to achieve sustainable development. For enterprises and individuals planning distributed solar projects, the feasibility of self-consumption should be a key consideration in the project planning process. To ensure efficient power consumption, businesses can explore models of collaboration with large industrial or commercial users, signing long-term agreements to achieve precise matching of electricity supply and demand. This cooperation model not only enhances the economic benefits of the project but also effectively reduces the risk of "abandoned power," promoting the sustainable development of solar projects.

At Xiamen TopFence Co., Ltd., we fully recognize the importance of these upcoming policy adjustments and their impact on the industry. As a leading provider of solar mounting solutions, we are committed to staying ahead of these changes by continuously enhancing our products and services. We believe that understanding and adapting to new policies is crucial for the continued success of solar projects, and we will continue to offer reliable and high-quality solutions to our clients to help them navigate this evolving landscape. Our focus remains on supporting the growth of clean energy and contributing to a more sustainable future.