ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Economy

China's rural poor turn sun rays into yuan

BEIJING -- There is not much money in Anhui Province, but there is plenty of sun.

     "I couldn't even use a fan in the summer," said Ni Chuanjiang. "I couldn't afford to."

     Ni recently lost both his wife and mother to cancer. The 50-year-old has survived since last August on his disability allowance -- and the sun. His house, a two-story building on the edge of a large rapeseed field, is equipped with 12 1.6-sq.-meter photovoltaic panels, installed last year by the local government. They supply two-thirds of Ni's power, and the surplus goes to the local grid, which pays Ni about 2,500 yuan ($402) each year. Normally, his annual state stipend is 2,000 yuan.

     About 100 impoverished households in the province's city of Hefei have received free panels like Ni's, thanks to a pilot program dubbed "Solar Power Solves Poverty." Launched last July, it will be expanded to 30 counties in six provinces across China, according to the National Energy Administration and the State Council Leading Group Office of Poverty Alleviation and Development.

     The program will also include large-scale solar developments on hills and greenhouse roofs. Local farmers will be able to make extra money by leasing non-arable lands or helping to maintain the solar farms.

     With coal pollution worsening, China wants to switch to cleaner power sources. It installed 13 gigawatts of solar power capacity last year, including both utility-scale plants and so-called distributed panels, which refers to power generation that is close to the consumer, such as Ni's panels.

Every little helps

The National Energy Administration (NEA) has not increased its solar power target for 2014 from the year before, but it initially aimed to raise distributed panel capacity from 0.8GW to 8GW. By the end of the third quarter, however, less than 2GW of distributed panels were in place. The administration has since lowered its target for the year and 2015, said Liang Zhipeng, deputy director of the administration's new energy department, during an Oct. 21 internal meeting.

     Some experts blame the delay on China's long neglect of potential in its vast countryside.

     Han Xiaoping, the chief information officer of China5e.com, an energy news portal, said government subsidies are only available to those who want to install panels in cities. There are no incentives for farmers or developers in rural areas who do not qualify for the poverty alleviation scheme to buy panels, he said. There is also very little infrastructure for sending power to the national grid.

     Even in cities, expansion is not without problems. Rooftop ownership is generally shared by multiple residents, and the decision to install solar panels can be extremely time-consuming. "I have suggested before that the building management companies take initiatives in [solar panel] developments," said Li Chengjin, the vice chief secretariat of Yunnan Province Solar Power Industry Alliance. "But they are not interested."

     To many in the industry, the "Solar Power Solves Poverty" program could be a major breakthrough. It would help support farmers' lives and boost solar power capacity in rural areas, said Zhang Xucheng, a manager for Sungrow Power Supply, a Shenzhen-listed supplier of solar and wind power equipment.

     Xiao Bo, chief of poverty alleviation in Hefei, capital city of Anhui Province, told the local Jianghuai Morning News: "The city has 1.25 million rural households. If 50% of them install a 3kW panel, it would amount to 1.9GW of solar power capacity."

Searching for answers

China has flirted with other solutions before.

     In 2009, the "Golden Sun Project," sponsored partly by the NEA and Ministry of Finance, promised to cover 50% of investment in qualified solar-power plants. The scheme attracted rampant corruption: Developers over-declared expenses and used the lowest-quality equipment to build plants that were often never put to use. Hardly any ever connected to the national grid, leaving most panels idle.  Liu Tienan, the head of the NEA when "Golden Sun" was rolled out, was found guilty of taking bribes for an unrelated project and sentenced to life imprisonment on Dec. 10.

     The Golden Sun scheme cost 20 billion yuan and was declared a failure in 2012.

     Having learned from the mistake, the State Grid announced in October that year that it would connect solar power producers to the grid for free. This encouraged solar panel makers to start their own plants, as oversupply had shrunk their profit margins.

     And yet, China still fails to meet its solar power installation target. In August, Huang Bibin, a State Grid Energy Research Institute researcher, blamed the lack of suitable roof tops and financing.

     "Most of the best locations were used in the Golden Sun Project already," Huang said at an industry summit.

     Although the government has been relaxing collateral conditions and providing low-interest loans for distributed power investment, many banks are still wary of the default nightmare of 2012 -- the last round of solar power craze. They are reluctant to remove the solar power industry from their blacklists so soon.

     She Haifeng, the chief executive officer of ET Solar, a Jiangsu-based solar power system contractor, said funding in China for companies like his is extremely difficult. "In China, what matters most is not the potential of the project, but the company's background," he said. "State companies can easily get loans. For small private businesses, it's nearly impossible."

     Ni has no such worries. He already has his panels, courtesy of the local government. For him, having plenty of sun in Anhui is no longer a curse, but a blessing. 

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends May 26th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media