A market report from IMS Research indicates that despite installing over 220MW of photovoltaic modules in China in 2009 and a four-fold increase from 2008 due to two government incentives, several hurdles still need to be overcome for the China PV market to reach its full potential

IMS Research identified the following major issues which remain unresolved and need to be overcome before mass adoption takes place. These are: poor grid connection capability, no national industry standards for PV components and grid-connected PV systems and the lack of a clear feed-in-tariff (FIT) for all future PV systems. Regions suitable for large-scale PV systems are generally far from the regions consuming the electricity. It is uneconomical to transmit the power to distant population centres due to the financial burden of installing new transmission infrastructure and the efficiency losses associated with this.

Jackey Wang, senior analyst at IMS Research commented "As the size and number of PV systems increase, the impacts on power grid becomes more significant. National industry standard become more important as they can help maintain the quality of electricity from PV systems and help the grid operators manage the grid more effectively Chinese grid companies are currently quite unwilling to purchase the electricity generated by PV as there is uncertainty about the quality of the electricity and the impacts on the grid."

Although it had been widely anticipated that a national FIT would be announced by the end of 2009 after the FIT of Dunhuang's 10MW PV project was set at CNY 1.09/kWh in July, this did not occur. In a recent industry forum, one government official said that it was impractical to set a unique national FIT for all PV projects in the near future as the cost of PV projects is still too high compared with hydroelectricity and coal.

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