Public-Private Partnerships for Solar Development in China

Over the past decade, the solar market in China has boomed from nearly nothing to an installed capacity of more than 43 GW in 2015. Costs of solar produced power have come down tremendously. In the next few years, solar generated power is expected to be price competitive with grid power in much of the country. Despite this, solar still represents only around 2% of China’s installed electricity capacity. The Chinese Government has ambitious plans to spur further growth of solar in order to improve environmental sustainability.



This Capstone report, undertaken on behalf of China's Ministry of Finance, aimed to identify Public-Private Partnerships strategies that would help China realize its solar goals. Through research and interviews with practitioners, this report identified a number of barriers that restrain solar deployment in China and examined the policies and financial innovations introduced in the U.S., Europe and Japan that have contributed to the development of the solar market in those countries.



Considering the barriers faced by the solar market in China and drawing lessons from the experience of other countries in promoting solar development, this report puts forward three recommendations to scale up China’s solar capacity: i) establish a policy bank focused on solar development, ii) provide credit support to attract further private and possibly international investors and lenders to the Chinese solar market, and iii) promote community solar as an alternative to traditional rooftop solar that would allow all Chinese people to participate in the country's development of solar energy.