Photovoltaic (PV) project internal rates of return (IRR) have seen a significant improvement because of dropping module and balance of system (BOS) prices. As a result there has been a tremendous increase in project development based activities in China. As per the recently released China Deal Tracker report by SolarBuzz, PV project pipeline in China for the non-residential sector saw a growth of up to 16 GW. This was by the end of the month of October.

1,104 non-residential projects have been narrowed down by SolarBuzz in China as having installed, or are in the process of development and installation. These projects that are still in the planning stage are based in 29 Chinese provinces. Qinghai, Gansu, Ningxia, and Inner Mongolia are the topmost as far as megawatt terms go. They are followed close on the heels by Sichuan, Jiangsu, Shandong, Shaanxi, Tibet as well as Anhui. 86 per cent of the complete pipeline is represented in these 10 places.

The report says that 195 projects with a combined capacity of more than 1.8 GW will complete installation by 2011. That will bring the installed capacity of China very close to that of USA. Pushed forward by the Qinghai 930 program and the policy of unified national feed-in tariff (FIT), around 54 per cent of the MW capacity will be placed in the northwest area.

The leading seven groups of project developers are jointly responsible for almost 1 GW of PV demand in 2011. This figure is inclusive of enterprises that are state owned like the China Power Investment Corporation, China Guodian Corporation, China Huadian Corporation, China Guangdong Nuclear Power Holding Corporation, and China Energy Conservation & Environmental Protection Group. The only private group in this lot is the CHINT Group.

In a release, Ray Lian, analyst at SolarBuzz said, “China’s FIT rates 1.15 CNY/kWh in 2011 and 1.0 CNY/kWh for 2012—used to be considered so low that project development activities have been mostly limited to high solar radiation regions such as Golmud. However, system prices fell so fast in 2011 that project profitability has been improved to reasonable levels in other locations.”

He continued, “Projects entitled to the Golden Sun and Solar Rooftop programs will enjoy the highest IRRs in Q4’11 and 1H’12. With at least 8 CNY/Wp rebate to system cost approaching 12 CNY/Wp, owners of these projects will not leave money on the table. As a result, the market share of the building-mount segment in China will show a significant increase over the next several quarters.”

In other news, falling module prices are causing a boom in solar development, and On the Move Systems Corp. (OMVS) said it is working to accelerate the process.

In a release on Sept. 20, the company said decreases in the cost of new solar panels have led to a surge in commercial-scale solar development throughout the U.S. Market research firm SolarBuzz reported last week that the nation's non-residential solar project pipeline increased from 17,000 megawatts to 24,000 megawatts in just two months, largely due to solar module price drops over the summer.