Why has ground-mounted photovoltaics in Guangdong been "banned" again? What message does this send? Could it trigger a domino effect?

Remember that on August 24, Brother Qiang wrote an article titled "Photovoltaic Power Plants Fully 'Embrace Losses,' Facing Another Round of Land Tax 'Post-Autumn Settlement'..."—a piece that deeply analyzed the current situation faced by China's large-scale centralized PV power plants amid the ongoing electricity market reform following the 531 policy. Just three days later, on August 27, Guangdong Provincial Energy Administration released the "Implementation Opinions on Carrying Out the " (Draft for Public Comment), explicitly stating: No longer developing large-scale, ground-mounted photovoltaic power projects; instead, future efforts will focus on supporting rooftop distributed PV systems. This policy has undoubtedly sent strong ripples through the industry. After all, Guangdong isn’t just China’s top economic province—it’s also a major electricity-consuming region. On the generation side, its power prices have consistently remained around 0.45 yuan/kWh, a figure that stands out distinctly across the country, surpassing most other provinces by 0.05 to 0.1 yuan/kWh. In other words, even amid the nationwide trend of photovoltaic power plants operating at a loss, Guangdong continues to be one of the regions offering the most attractive returns. Yet, it is precisely in this "premium market" that Guangdong has taken the lead in announcing the suspension of large-scale, ground-mounted solar projects. What exactly does this move signal? Could it become the "bellwether" for future nationwide adjustments in PV policies? (If you find this insightful, please hit the follow button and give it a thumbs-up! Feel free to share it with friends who might benefit—let’s continue the conversation and exchange ideas in the comments section. And if there’s anything inaccurate, don’t hesitate to point it out in the comments!)

I. The Deeper Logic Behind Guangdong's Latest "Ban" on Ground-Mounted Photovoltaics

Actually, Guangdong's "brake" on large-scale centralized photovoltaic projects wasn't entirely unexpected. As early as 2022, the Guangdong Provincial Development and Reform Commission issued the "Notice on Regulating the Management of Centralized Photovoltaic Power Station Projects," highlighting that the province's total registered capacity for centralized PV had already exceeded 90 million kilowatts at the time—yet actual project commencement and grid connection lagged far behind, giving rise to a series of irregularities such as "land grabbing," "speculation in land resources," and "registration without construction." This latest policy upgrade effectively shuts the door completely on large-scale ground-mounted centralized PV projects.

From a practical standpoint, Guangdong has suspended centralized photovoltaic projects for three main reasons:

1) Land resources are extremely scarce: Guangdong is an economically dense region where industrial development, urbanization, and infrastructure already face tight land availability. As a result, the centralized approach to photovoltaic projects—often requiring tens of thousands of mu of land—clashes sharply with the region's limited land supply and growing demand.

2) Serious historical legacy issues exist: In recent years, during periods of loose policies, numerous developers "grabbed land" without actually building, leading to a severe mismatch between the registered development scale and the available capacity for absorption. This not only wasted valuable land resources but also fueled speculative resale activities.

3) Policy-driven transformation: Against the backdrop of the "Dual Carbon" goals and the broader transition to new energy, China's National Energy Administration recently issued the new "Administrative Measures for the Development and Construction of Distributed Photovoltaic Power Generation," emphasizing the priority of distributed systems. Guangdong Province, tailored to its own unique circumstances, has explicitly stated that it "will no longer develop large-scale ground-mounted projects." This decision not only aligns with national policies but also reflects a pragmatic approach suited to local conditions.

II. Policy Signals: A Centralized "Winter," a Distributed "Spring"

Guangdong's decision is not just a local policy—it’s also a signal of an emerging trend. Combined with Qiangge’s assessment, the coming year can arguably be described as a "cold winter" for centralized photovoltaics, and this doesn’t apply only to Guangdong; it’s a nationwide phenomenon.

Constrained by land scarcity, rising electricity curtailment rates, back payments of the "two taxes" on land, and declining market-based electricity prices, the profitability of nationwide centralized photovoltaic power plants has significantly shrunk. According to calculations based on the post-electricity reform pricing mechanism this year, centralized electricity prices across regions are expected to fall by 0.05 to 0.1 yuan/kWh compared to the benchmark coal-fired power price. Once energy storage costs are factored in, nearly all centralized power plants will likely enter loss-making territory.

The "Spring" of Distributed Photovoltaics

In contrast, the distributed photovoltaic model of "self-generation and self-consumption, with surplus power fed into the grid" is far more flexible. Guangdong's policies clearly support new application scenarios such as rooftop PV systems, agricultural building-integrated PV, and photovoltaic installations on highway slopes—and for most projects, there’s currently no mandatory requirement for the "self-consumption ratio," leaving ample room for market maneuverability. Combined with Guangdong’s well-developed electricity consumption market, the profitability of distributed power plants actually proves to be more resilient.

Therefore, this policy essentially represents a "structural reshaping" of the photovoltaic industry landscape: centralized large-scale power plants are gradually losing ground, while distributed, small yet elegant projects are seizing their moment of opportunity.

Currently, in terms of both the national market and policy landscape, Fujian can be said to be far ahead with its comprehensive policies, followed closely by Zhejiang and Guangdong. As for which regions are best suited for developing new energy, feel free to share your thoughts and join the discussion in the comment section!

3. Will Guangdong's "ban" on centralized systems trigger a domino effect?

Guangdong's move undoubtedly carries "bellwether" significance. After all, even Guangdong—where electricity prices are highest and renewable energy consumption is most favorable—has halted large-scale centralized projects. So, will other provinces with lower electricity prices and higher curtailment rates follow suit?

The answer is, most likely, yes.

Northwest Region: Land resources are abundant, but power restrictions have severely impacted operations, driving electricity prices down to as low as 0.28–0.3 yuan/kWh. Spot trading has been out of the question for quite some time now, and when combined with energy storage, nearly all projects are operating at a loss. Looking ahead, authorities may tighten approval processes and impose limits on the scale of newly built centralized energy facilities.

Central China and East China regions: The power grid faces high load, but land is scarce—similar to Guangdong's situation—so it might be worthwhile to adopt the "distributed-first" approach.

South China and the Chengdu-Chongqing region: As the economy develops and electricity consumption grows, there may also be a gradual shift toward distributed photovoltaics.

It can be said that Guangdong's policies are likely to become the catalyst for a nationwide "distributed transformation," triggering a domino effect at the industry level.

IV. Conflicts and Solutions in the Photovoltaic Industry

From a broader perspective, Guangdong's policy reveals the fundamental contradiction currently facing the photovoltaic industry:

Cost Reduction vs. Quality Assurance: Against the backdrop of generally declining yields, all investors are closely watching IRR (Internal Rate of Return), and reducing costs has become an "essential lesson." However, since equipment costs account for 40% to 50% of total investment, excessively driving down prices can directly lead to a decline in quality. According to the latest report from the National Photovoltaic Quality Inspection Center, the pass rate of photovoltaic modules has plummeted from 100% to just 62.9%, undoubtedly posing significant risks to the future safety of power plants.

Expansion vs. Absorption: Centralized power plants are being launched on a large scale, yet they lack sufficient capacity for consumption and transmission, leading to a sharp rise in curtailment rates. In contrast, distributed power plants, located closer to load centers, better align with the safety and economic principles of the power system.

Policy-driven vs. Market-driven: In the past, the photovoltaic industry relied on policy subsidies for growth, but now that subsidies have been completely phased out and market-based trading has become the norm, the industry must directly confront real-market competition.

Therefore, Guangdong's choice is not merely a "forced" policy adjustment, but rather an inevitable evolution of its industry.

Written at the end

Guangdong's halt on large-scale ground-mounted photovoltaic projects is not just a "brake," but also a clear "shift in direction." This move reflects the local government's reflection on the strain on land resources and longstanding legacy issues, while also highlighting the growing challenge of sustaining centralized power plants amid ongoing electricity price reforms.

This policy sends a clear signal: in the future, competition within the photovoltaic industry will no longer hinge on who secures more land, but rather on who can achieve stable, sustainable returns by optimizing efficient distributed layouts, ensuring safer equipment quality, and adopting more flexible business models—all within limited space.

It is foreseeable that Guangdong's decision may trigger a nationwide domino effect, accelerating the photovoltaic industry's transition from "scale expansion" to a new phase of "quality enhancement." For businesses, shifting toward distributed models, prioritizing quality, and strengthening comprehensive service capabilities may well be the true key to survival in the future.