June 2018

On June 1, 2018, only two days after the completion of 12th SNEC International Photovoltaic Power Generation Conference, the world’s biggest solar conference and a central gathering of all the Chinese PV manufacturers, the Chinese central government announced a nation-wide solar subsidy cut that resulted in the Chinese solar stocks tumbling with the falling range from 7% to 31%.[1]  Specifically, the National Development and Reform Commission, the Ministry of Finance and the National Energy Administration of China issued the “2018 Solar PV Generation Notice” (the “Notice”)[2], imposing caps and reducing the feed-in tariff (“FiT”) mechanism in connection with China’s domestic PV projects[3], and at the same time setting rules at the central government level to urge marketization of China’s solar industry.[4]

Overview of the Notice

Imposition of Project Cap

Firstly, the Notice imposed a 10 GW cap on capacity for distributed generation projects and stopped utility-scale project for 2018. This is a steep drop from last year’s installation of 19 GW distributed generation projects (out of 53 GW of all PV projects in China).[5] Also, the Notice provided that only those distributed generation projects that are connected to the grid no later than May 31, 2018 would be covered by central government’s budget, whereas the financial responsibility for other distributed generation projects would be shifted to local governments.[6]  In addition, the Notice encouraged the local governments to come up with more solar supportive policies, to reduce non-technological costs, and as a result to reduce the needs for central and local governments’ solar subsidies.[7]  Separately, the Notice abolished the utility-scale projects and instructed local governments not to approve any utility-scale projects until central government’s further notice.[8]
Continue Reading China’s Renewable Policy Shift and its Global Implications

The California Public Utilities Commission (“Commission”) voted recently to approve $768 million in expenditures for electric vehicle infrastructure programs proposed by the state’s three investor-owned utilities (“IOUs”). The programs are part of a directive of SB 350 that requires utilities to undertake transportation electrification activities.

Here is a brief overview of the approved programs:

  • Approved at $137 million, SDG&E’s program provides rebates to up to 60,000 residential customers that install Level 2 (“L2”) charging stations, which refer to electric vehicle supply equipment (“EVSE”) connected to a 240-volt outlet.
  • PG&E was approved for $22 million to install make-ready infrastructure to support 234 fast charging stations, as well as $236 million to support 6,500 medium- or heavy-duty EVs (like electric buses and trucks).
  • SCE similarly received approval for $343 million to install make-ready infrastructure to support 8,490 medium- or heavy-duty EVs.
  • In addition, the Commission approved $29.5 million for program evaluation.

Here is our analysis of what the Commission’s order means for the future of EVs and what the industry should be paying attention to:

In terms of charging technology, 150 kW fast charging and residential L2 are the minimum.

The Commission’s order emphasizes the need to use up-to-date technology to ensure some longevity for the investments. For example, in response to PG&E’s proposal for three levels of fast charging stations, the Commission directed the utility to forgo the lowest level and only install customer-side electric infrastructure necessary to support EVSE of 150kW or larger, approving a 25% contingency due to the increased cost of the faster chargers. Additionally, the Commission also noted that participants in rebate programs will be responsible for the full cost of proprietary made-to-order EVSE and make-ready infrastructure, since these are not scalable and may result in stranded assets should the manufacturer go out of business or change technology. In the case of SDG&E’s program, the Commission sided with the utility over concerns raised by stakeholders that Level 1 charging (which uses a standard household 120-volt outlet) is sufficient for residential purposes. SDG&E argued that the more advanced L2 will provide grid benefits by allowing for managed charging when paired with time-variable rates that reflect grid conditions. The Commission also noted the ability of these chargers to provide valuable data on patterns of charging.
Continue Reading California Approves $768 Million for EV Infrastructure