Is the "wave of project terminations" here? The golden age of distributed PV isn't about to collapse!

Recently, YuNeng Holdings announced it is abandoning investment and acquisition opportunities in competitive projects related to distributed photovoltaics, user-side energy storage, and charging stations. Meanwhile, several key projects—including Sichuan SenNian New Energy's 10.287MW rooftop PV project, Shaanxi Xingping City's 50MW distributed PV project, Yongxing County's second-phase county-wide distributed PV project, and Shanxi Shuozhou's 400MW distributed PV initiative—have all been put on hold or officially terminated.

 

Multiple distributed PV projects are now facing a wave of terminations. This cooling-off trend is deeply unsettling for every professional in the solar industry, sparking widespread discussions about the sector's future development.

 

Photovoltaic Headlines believes this round of adjustment is not the industry’s “winter,” but rather an inevitable step as distributed PV moves away from its past phase of extensive expansion and enters a new stage of rational, mature development. As a core driver in achieving the "Dual Carbon" goals, the long-term positive fundamentals of distributed PV have never changed— The "sky" of photovoltaics won't fall!

 

Distributed capacity increased by 112.81 GW, representing a year-on-year growth of 113.33%.

 

On August 27, the Guangdong Provincial Energy Administration publicly sought comments on the "Implementation Opinions on Carrying Out the (Draft for Public Comment)." The draft clearly states that Guangdong Province will no longer develop large-scale, ground-mounted photovoltaic power generation and will instead focus on supporting the development of rooftop photovoltaic systems. Becoming the first province to focus solely on developing distributed rooftop photovoltaics.

 

The latest data from the National Energy Administration show that In the first half of 2025, China added 211.61 GW of new photovoltaic capacity. Compared to the first half of 2024, centralized installations added 98.8 GW, representing a year-on-year increase of 99.19%; distributed installations grew by 112.81 GW, up 113.33% from the previous year; residential installations increased by 25.63 GW, a robust 61.70% rise; and commercial & industrial installations expanded by 87.18 GW, marking a significant 135.43% growth over the same period last year.

 

 

It can be said that distributed photovoltaics still have vast room for growth, and the future looks promising.

 

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Frequent favorable policies are boosting distributed photovoltaics, ushering in a profound transformation.

 

At the start of 2025, with the release of two major policies, distributed photovoltaics are set for a profound transformation.

 

On January 23, the National Energy Administration issued "Measures for the Development and Construction Management of Distributed Photovoltaic Systems" From defining classification, industry management, filing, construction, grid connection to operation management—covering every stage of the entire process—key management requirements have been clearly outlined, establishing a supportive and standardized management system. This system aims to promote the healthy and sustainable development of distributed photovoltaic power generation, address bottlenecks such as grid integration and power consumption, and ensure a well-regulated market order.

 

On February 9, the National Development and Reform Commission and the National Energy Administration jointly issued "Notice on Deepening Market-Oriented Reform of On-grid Electricity Prices for New Energy and Promoting High-Quality Development of New Energy" , guiding the industry to shift from expanding "quantity" to enhancing "quality." Distributed photovoltaics are beginning to transition from simply selling electricity to fostering multi-dimensional value co-creation, demonstrating their worth across four key dimensions: energy restructuring, environmental premium, system-level advancement, and brand value.

 

These two policies, from the perspectives of management standards and electricity pricing mechanisms, jointly guide the distributed photovoltaic industry toward market-oriented and standardized development. While ensuring reasonable returns for existing projects, they also encourage new projects to enhance their market competitiveness, optimize resource allocation, and foster the long-term growth of the distributed PV sector.

 

After sorting through the latest news, PV Headlines found that, as of now, 18 provinces and cities—Ningxia, Guangdong, Hubei, Liaoning, Jilin, Guangxi, Hainan, Guizhou, Jiangsu, Shanxi, Anhui, Chongqing, Zhejiang, Shandong, Fujian, Sichuan, Inner Mongolia, and Hebei—have clearly defined the self-consumption ratio for commercial and industrial photovoltaic systems. The range is between 20% and 80%. 。

 

 

As of now, 19 cities and regions—Guangxi, Eastern Mongolia, Western Mongolia, Guangdong, Xinjiang, Hunan, Hainan, Zhejiang, Liaoning, Ningxia, Shanghai, Shandong, Gansu, Shanxi, Heilongjiang, Guizhou, Chongqing, Yunnan, and Hubei—have announced their implementation plans for "Document No. 136."

 

 

Among them, Multiple regions have explicitly pledged full support for distributed photovoltaic and decentralized wind power projects. Guangxi, eastern Mongolia, Ningxia, and Yunnan have all fully incorporated distributed projects into the mechanism-based electricity pricing system. In Guizhou, projects below 10 kV enjoy 100% of the mechanism-based electricity rate, which essentially means that all distributed projects are fully integrated into the system. Meanwhile, Hubei has clarified that for distributed new energy projects, the mechanism-based electricity rate can account for up to 80% of the project’s total provincial grid-connected power output.

 

Additionally, recently, the National Development and Reform Commission, the Ministry of Industry and Information Technology, and the National Energy Administration jointly issued a notice on launching the construction of zero-carbon parks, initiating the application process for nationally recognized zero-carbon park projects.

 

 

The document clearly outlines the fundamental requirements for building zero-carbon parks and outlines eight key tasks to support regions with the necessary conditions in pioneering the establishment of a batch of zero-carbon parks. Local governments have also rolled out relevant policies one after another—regions such as Sichuan, Jiangsu, and Hunan have all introduced specific goals and plans for constructing zero-carbon parks, creating a favorable policy environment that fosters the development of distributed photovoltaic systems within these green zones.

 

The revenue model has undergone a dramatic shift, with some distributed PV projects now facing a "wave of terminations."

 

On August 28, Yunneng Holdings issued an announcement regarding its decision to abandon investment and acquisition opportunities in peer-competitive projects related to distributed photovoltaic systems, user-side energy storage, and charging piles.

 

 

The announcement stated that, in accordance with the requirements outlined in the National Development and Reform Commission's "Notice on Deepening Market-Oriented Reform of New Energy On-grid Electricity Prices and Promoting High-Quality Development of New Energy (NDRC Price [2025] No. 136)," new energy generation capacity will be encouraged to participate in market trading. However, due to various factors, distributed photovoltaic systems, user-side energy storage projects, and charging station initiatives have not demonstrated significant competitive advantages within the company's new energy business—and as a result, they can no longer meet the company's investment return expectations.

 

 

Based on the company's current business situation and future transformation and development plans, in order to focus on the core track of large-scale new energy development, we have decided to forego commercial opportunities—both those currently available and potential acquisition prospects after operation—in distributed photovoltaic, user-side energy storage, and charging pile projects that are in direct competition with other enterprises controlled by Henan Investment Group or its affiliates. This strategic move aligns with the interests of the listed company and will not significantly impact the company's financial position or operating results.

 

This is not an isolated case. Recently, several major projects have been put on hold or officially terminated, including Sichuan SenNian New Energy’s 10.287 MW rooftop photovoltaic project planned in Chongqing, Shaanxi Xingping City’s 50 MW distributed PV project, the second-phase county-wide distributed PV project in Yongxing County, the second round of bidding for the 2.2 MW rooftop project at China National Nuclear Corporation Huineng’s Taiyuan Mail Processing Center, as well as the EPC general contracting tenders for Sections 2 and 3 of Shanxi Shuozhou’s 600 MW distributed PV project.

 

The primary reasons for project termination are the impact of the full market entry of new energy projects, which led to a reassessment revealing that the projects could no longer meet profitability requirements; changes in the market environment, resulting in the project failing to make substantial progress thus far; and shifts in the bidding plans.

 

Affected by the policy, The revenue model for distributed photovoltaics is undergoing a dramatic transformation. It faces three major challenges:

 

One is Industrial and commercial distributed systems will revolve around "load" and primarily focus on self-consumption.

Second, Distributed photovoltaics will participate in grid scheduling and electricity trading;

Third, Lower grid-connected electricity prices are forcing overall costs to decline. Meanwhile, reduced settlement rates for new projects are compelling companies to cut "non-technical costs."

 

Additionally, insufficient grid capacity is increasingly becoming a major constraint on project implementation. For instance, the second-phase termination announcement for the county-wide distributed rooftop photovoltaic power generation project in Yongxing County explicitly cited limitations in Chendi International’s grid capacity and recent policy adjustments as the reasons for ending the project.

 

 

Relevant data shows that, as of August 2025, nearly 600 cities and counties nationwide have been designated as "red zones" for the power grid. These areas are restricting the connection of new photovoltaic projects due to either excessively high penetration rates of distributed PV (exceeding 25%, for example) or transformer load rates surpassing permissible limits (such as 80% or higher).

 

Where should distributed photovoltaics go from here?

 

Even amidst challenges, the future of distributed photovoltaics is far from bleak—it’s actually transitioning from a phase of "rampant, land-grabbing growth" to a new stage of "carefully crafted, high-quality development."

 

Innovative business models have become the key to breaking the deadlock. The once-common single model of "investing in power plants and earning profits by selling electricity" has long since become unsustainable. Replacing it is the "self-consumption plus surplus-power trading" model—where energy is first used on-site, and any excess is then sold off. This innovative approach has now become the industry's mainstream trend. Meanwhile, this shift is also compelling grid companies to move beyond their traditional role of simply "selling electricity," prompting them to transform into "integrated energy service providers" capable of delivering a wide range of value-added services.

 

Driving technological integration is the key to breaking through bottlenecks. Once optional, "PV + energy storage" has now become the "standard configuration" for distributed PV projects. Adding energy storage not only helps meet the stringent policy requirements for power consumption but also allows project operators to capitalize on the price difference between off-peak and peak electricity rates by storing power during low-demand periods and discharging it during high-demand times. Moreover, energy storage can provide ancillary services such as peak-shaving and frequency regulation to the grid, opening up additional revenue streams for the project.

 

Expanding into diversified markets is the new direction for industry development. As the green electricity trading market continues to mature, every kilowatt-hour of distributed photovoltaic-generated green power can be converted into a "Green Electricity Certificate (GEC)," which can then be sold to companies with carbon-neutral goals—companies that are willing to pay an additional "environmental premium" for green electricity in order to fulfill their own emission reduction commitments.

 

In addition, integrating distributed photovoltaic projects into a virtual power plant (VPP) and participating in unified aggregation-based scheduling—where generation or consumption is adjusted according to grid demand—can also earn capacity subsidies and electricity fee compensation, which will further enhance project revenue as an important supplement.

 

It can be said that the future of distributed photovoltaics is no longer a simple race to see "who can build more and on a larger scale," but rather a comprehensive battle centered on "whether the project quality is high, operational efficiency is strong, financing costs are low, and business models are innovative."

 

Behind the current "wave of corporate淘汰" in the industry lies, in fact, the photovoltaic sector's inevitable journey from extensive growth to rational maturity—though the process is fraught with challenges, it represents a crucial transformation essential for achieving long-term development.