Photovoltaic's 'day' enters its 'darkest hour,' can it still 'shine'?

In recent years, 2025 has been a 'transformative year' for the photovoltaic industry that will go down in history. At the beginning of the year, a single '430 policy' completely ended the golden age of distributed photovoltaics 'full on-grid access'; then 'Document No. 136' set the node of '531', and from June 1, all incremental photovoltaic projects have fully entered the market-oriented trading mechanism, saying goodbye to the 'fixed income' model. To make matters worse, local policies have been intensively implemented, with Jilin limiting on-grid electricity to no more than 20%, Wuhan clearly stating that on-grid electricity exceeding 50% will not be settled, and Ningxia, Shanxi, and other places clearly stipulating that 'the self-generation and self-use ratio must reach more than 60%'... Only Guangdong and Jiangsu have not yet set proportional red lines, but they have also released signals of moving closer to the market in policy statements.

The photovoltaic industry is rapidly entering a 'deep water area'. 。

Yesterday, the new electricity price policies simultaneously introduced by Shandong and Hubei became the 'last straw' that broke the industry's morale. The deep adjustment of time-of-use electricity prices has led to a 'fundamental collapse' of the photovoltaic power generation profit model. It can be said that the sky for photovoltaics has truly darkened, a dark and oppressive sky, seemingly about to collapse. (If you find this helpful, please follow, like, and share it with your friends. Please point out any mistakes in the comments.)

 

I. New Electricity Price 'Logic': Pushing Photovoltaics into the Darkest Hour

Regions represented by Shandong, Hubei, and Jiangsu, through the division of more refined time-of-use electricity price periods, have turned the golden midday period for photovoltaic power generation into a 'deep valley period,' with the electricity price reduction rate as high as 90%, directly halving project income.

In Shandong, 11:00 to 14:00 is the deep valley period, with the lowest electricity price being only 10% of the flat-rate electricity price. What was originally the golden three hours for photovoltaic power generation has now become the representative of 'cheap electricity'; Hubei has extended the deep valley period to 6 hours (9:00-15:00) during holidays, making it 'difficult for photovoltaic power generation to sell electricity'; while Jiangsu, while implementing midday deep valley electricity prices during holidays, has removed the self-generation and self-use ratio limit, allowing full on-grid access, but this seemingly beneficial policy hides a greater market risk: full participation in spot trading means that electricity prices are market-determined, and income is subject to 'negative electricity prices' at any time.

II. The Three Major Contradictions of the Photovoltaic Industry Erupt

1. Power Generation Peak vs. Low Electricity Prices: Increasing Mismatch

Photovoltaic power generation is mainly concentrated between 10:00 and 15:00 in the midday, but the electricity price mechanism conversely designates this period as a 'deep valley.' This means that although the project has a large power generation, the income is extremely low, creating a 'high volume, low price' scissors difference. For example, in Jiangsu, peak photovoltaic power generation income has shrunk by more than 50%, forcing investors to reconsider the originally stable IRR model.

2. Uncontrollable Income under Market-Oriented Trading

The introduction of 'Document No. 136' means that new energy has officially entered the 'market game period' from the 'policy dividend period'. After participating in the spot market, photovoltaic companies must face electricity price fluctuation risks, and even extreme situations of 'negative electricity prices'. The Shandong spot market once saw a winning bid price of -0.08 yuan/kWh, which could not even cover the per-unit cost of the power plant, directly impacting the project's survival bottom line. Looking at the mechanism electricity price predictions in other places, they are directly 0.13 yuan/kWh lower than the coal-fired benchmark. With such electricity prices, the return period is further extended, the investors' hearts...

3. Energy Storage is Not Mandatory, but 'Has to Be'

Although the policy level has removed the requirement for mandatory energy storage, the reality is: without energy storage, it means that midday power generation will be swallowed up by deep valley electricity prices. The current investment in energy storage systems remains high. Taking 0.68 yuan/Wh as an example, a 10MW/20MWh system investment is about 13.6 million yuan, and the peak-valley price difference needs to reach more than 0.7 yuan/kWh to achieve break-even. Currently, the average price difference in Jiangsu is only 0.6-0.8 yuan/kWh, meaning that the actual investment payback period is as long as 6-8 years, deterring many companies.

III. What is the Way Forward? Three Paths to Photovoltaic 'Self-Rescue'

In this darkest hour, the industry has not been sitting idly by, but exploring various ways to break the deadlock.

1) A Typical Example of State-Owned Enterprises Breaking the Deadlock—SPIC

Since last year, SPIC has been continuously selling off poorly performing assets with low yields. In April 2024, DianTou Energy terminated two household photovoltaic projects. In August, Inner Mongolia sold its household photovoltaic assets. In November, Beijing Zhonghe Zero Carbon Energy Co., Ltd. (a shareholder of State Power Investment Group Yunnan International Power Investment Co., Ltd.) transferred 10 photovoltaic and energy storage projects, including the Wuhan Economic and Technological Development Zone Integrated Smart Energy Project, the Jintang Whole County Rooftop Distributed Photovoltaic Project, and the Wenshan Whole City Rooftop Distributed Photovoltaic Project. In November, the State Power Investment Group transferred equity in three new energy companies: Jinan Zhongdian Photovoltaic Power Generation Co., Ltd., Luoyang Huamei Power Co., Ltd., and Shanghai Zhongdian Changxing Future Development Co., Ltd. Then, the integration of Wuling Power in March this year announced that the photovoltaic industry is shifting from 'scale expansion' to an era of 'priority to efficiency'. This year, the direction of photovoltaic investment by state-owned and central enterprises is not on-grid, but direct supply, large bases, etc., directly approaching the power consumption side, and everyone can understand how to play the game.

Solution 2: Energy Storage + Intelligent Control, Reconstructing the Income Model

Using the "charge during the deep valley, discharge during the peak" "two charges and two discharges" model, coupled with an intelligent control system, improves the utilization rate of energy storage equipment. Zhejiang and Jiangsu have achieved an average of two charges and discharges per day, and the IRR can be increased to 8%-10%. At the same time, by aggregating distributed resources through a "virtual power plant" to participate in the electricity spot market and ancillary service market, capacity subsidies and frequency regulation income can be obtained. For example, Jiangsu New Energy achieved a premium income of 0.43 yuan/kWh through green electricity trading, providing a replicable sample for the industry.

Solution 3: Green Electricity Direct Supply and "Over-the-Wall Power Sale" and "Source-Network-Load-Storage" Open New Profit Channels

Taking Jiangsu as an example, in 2024, the volume of green electricity transactions reached 12.657 billion kWh, a year-on-year increase of 143%, and the trading premium range was between 0.05-0.15 yuan/kWh. High energy-consuming enterprises have a rigid demand for green electricity, which further promotes the further development of models such as "green electricity direct supply," "over-the-wall power sales," and "source-network-load-storage": distributed power plants directly sell electricity to nearby users, bypassing grid transmission fees, reducing transaction costs by about 30%, and effectively improving project IRR.

Solution 4: Rush Installation and "Photovoltaic +" Model, Seizing Transformation Dividends

Before June 1, 2025, existing projects still enjoy the benefits of "price difference subsidies," and a wave of rush installations is sweeping across the country, leading to a short-term surge in component demand. At the same time, the industry is actively exploring new business models such as "photovoltaic + load" integration, "photovoltaic + prison," "photovoltaic + transportation," and "photovoltaic + data center," pushing photovoltaics to transition from a single power source to a comprehensive energy service provider.

After the darkest night, there will always be dawn.

The "darkest hour" is often the starting point of change.

Photovoltaics once rapidly rose under the protection of subsidy policies; now, facing the triple challenges of electricity pricing mechanisms, market transactions, and grid connection pressure, only transformation, reconstruction, and integration can pave a path toward sustainable development.

From prioritizing scale to prioritizing efficiency, from single electricity sales to diversified services, China's photovoltaic industry is undergoing a profound "reconstruction".

So, can the sun still shine on photovoltaics?

The answer is yes—only this time, it relies not on sunlight, but on wisdom and courage.