Green industrial policy in the post grid parity era: Governing integrated Solar+ projects in China

Abstract

China has entered the age of grid-parity for solar PV technologies, which impose significant challenges for the Chinese government to continue its support on this fast growing sector. The traditional rationale and design of many green industrial policies (GIPs) in the renewable energy sector, such as the multi-tiered feed-in tariff system introduced at earlier stage, has become increasingly inefficient. New policy approaches are needed. We use a case study of Integrated Solar Energy and Desertification Prevention (ISE-DP) initiative in China's Inner Mongolia region to investigate the potential of providing further support for the solar PV industry on the basis of the accrued development benefit, such as ecological restoration, agricultural outputs, and local employment. We argue that genuine and verifiable contributions of these development benefits should be the major criteria for further government support once the levelized cost of renewable energy production is reached. We find that integrating multiple purposes into single solar energy infrastructure project would require a more comprehensive governance framework among various government agencies, private companies, and local communities. In addition, stringent and transparent evaluation systems should be installed to guarantee long term success of ISE-DP business model.