In order to meet the new requirements of the national energy structure transformation, the National Energy Administration issued the "Management Measures for the Development and Construction of Distributed Photovoltaic Power Generation (Draft for Comments)" on October 9, 2024, providing clearer regulatory guidance for the development and construction of distributed photovoltaic power generation projects, and publicly soliciting opinions from the society. This article aims to introduce and interpret the key issues that need to be focused on in the draft for soliciting opinions, based on the author's legal practice experience in the photovoltaic industry.

For the first time, the type of "non natural person household use" project has been clarified, and industrial and commercial projects have been subdivided into two categories: "general industrial and commercial" and "large-scale industrial and commercial"

Compared with the Interim Measures for the Management of Distributed Photovoltaic Power Generation Projects (Guoneng Xinneng [2013] No. 433), Article 4 of the Draft for Soliciting Opinions divides distributed photovoltaic projects based on the filing subject and voltage level, and clearly limits the total installed capacity of specific project types, making the classification of distributed photovoltaic projects clearer and laying the foundation for differentiated management.

Specifically, household distributed photovoltaic power generation projects are further divided into "natural person household use" and "non natural person household use". The former refers to distributed photovoltaic projects invested and constructed by natural persons using their own residential properties, with a voltage level of no more than 380 volts at the public connection point. The latter refers to distributed photovoltaic projects invested and constructed by non natural persons using residential properties, with a voltage level of no more than 10 kilovolts at the public connection point and a total installed capacity of no more than 6 megawatts.

At the same time, industrial and commercial distributed photovoltaic projects are further subdivided into "general industrial and commercial" and "large-scale industrial and commercial". The former refers to distributed photovoltaic projects built using public institutions such as party and government agencies, schools, hospitals, municipal, cultural, sports facilities, as well as industrial and commercial buildings and their ancillary places, with a public connection point voltage level of 10 kV (20 kV) or below and a total installed capacity of no more than 6 MW; The latter refers to distributed photovoltaic projects constructed using buildings and their ancillary facilities, connected to the internal power grid of power users or providing dedicated power supply to users (not directly connected to the public power grid), with a public connection point voltage level of 35 kV and a total installed capacity not exceeding 20 MW, or a public connection point voltage level of 110 kV (66 kV) and a total installed capacity not exceeding 50 MW. From now on, industrial and commercial distributed photovoltaic projects will be registered as different project types based on their voltage levels. In other words, once the voltage level reaches 35 kV, the regulations for "large-scale industry and commerce" need to be applied, and the draft for soliciting opinions has adopted certain restrictive policies for "large-scale industry and commerce". Therefore, from the perspective of investment convenience, in subsequent project investments, distributed photovoltaic projects for industry and commerce will mainly focus on 10 kV (20 kV) and have an installed capacity of no more than 6MW.

（2） First addition of "all self use" internet mode

On the basis of subdividing various types of distributed photovoltaic power generation projects, Article 5 of the draft for soliciting opinions adds for the first time the "all self use" mode on the basis of the previous "full grid connection" and "self use, surplus electricity grid connection" modes, and limits the scope of grid connection modes for different project types. In the context of the draft for soliciting opinions, the range of grid connection modes available for household distributed photovoltaic projects is the widest, and all three grid connection modes can be applied. On the contrary, industrial and commercial distributed photovoltaic projects are no longer suitable for the "full grid connection" mode, and large-scale industrial and commercial distributed photovoltaic projects can only choose the "all self use" mode.

（3） Clearly propose the participation of distributed photovoltaic projects in the electricity market and green certificate trading

Regarding the hot topic of distributed photovoltaic entering the market, the draft for soliciting opinions has not yet made detailed provisions. However, Article 36 has clearly stated that distributed photovoltaic power generation projects can participate in various electricity market activities such as energy trading and auxiliary services fairly through independent means, or through various forms such as microgrids, source grid load storage integration, virtual power plant aggregation, etc., in accordance with relevant national regulations. As for the corresponding supporting policies, they will be formulated by each region based on the development status of local distributed photovoltaic power generation and the progress of electricity market construction.

In addition, the marketization of the green certificate system is also being promoted simultaneously. This regulation specifies that distributed photovoltaic power generation projects that are registered and registered will be issued green certificates based on their total power generation. Among them, tradable green certificates will be issued for grid connected power generation. After holding the green certificate, the project investment entity can independently participate in green certificate transactions in accordance with the relevant management regulations of the green certificate. From this, it can be seen that the supply structure of subsequent green certificates should distinguish between on grid electricity and self generated electricity consumption. Only on grid electricity can obtain tradable green certificates, and the market value of green certificates will be further increased.

（1）The internet mode is bound to the project type, and industrial and commercial projects cannot fully access the internet

The biggest change in this draft for soliciting opinions is to refine project types and match them with different online modes. Of particular note is that the "Industrial and Commercial Distributed Photovoltaic" project is no longer suitable for the "full grid connection" mode, and "Large scale Industrial and Commercial" projects can only choose the "all self use" mode. They also need to configure anti backflow devices to achieve full self use of power generation. It can be foreseen that once the relevant content of the draft for soliciting opinions is officially released, the development difficulty of distributed photovoltaic projects with voltage levels above 35 kV will sharply increase due to the need to bring their own loads. At the same time, the operation and revenue of the project will undoubtedly depend more on the electricity user, resulting in a decrease in project autonomy and an increase in uncontrollable risks.

Based on this, it can be clearly seen from the provisions of the draft for soliciting opinions that the investment space of large-scale photovoltaic projects (especially the commonly seen fully connected ground distributed projects in practice) in the distributed field will be significantly compressed. In the subsequent stages, distributed projects will mainly focus on low voltage and small capacity, while large-scale ground distributed projects are likely to be included in centralized project management, subject to requirements such as scale indicators and storage allocation.

If legal regulations are not considered, from a market perspective alone, the aforementioned regulations actually reflect to some extent the current consumption dilemma. Although they may have an impact on projects that rely on subsidies or full grid connection in the short term, from the perspective of adapting to new energy consumption requirements, forcing distributed photovoltaic energy storage to be configured, and reducing the impact on grid resources, restricting the full grid connection of industrial and commercial distributed projects can help optimize the allocation of power resources and provide new opportunities and directions for technological innovation and sustainable development of distributed photovoltaics.

（2） For the first time, the limitation of the "same land ownership red line" has been clarified, further restricting the "sale of electricity through partition walls" and "project division"

The concept of "same land property rights red line" has been mentioned multiple times in this draft, reflecting the regulatory restrictions on distributed photovoltaic power generation projects in the draft.

Article 4 of the Draft for Soliciting Opinions clearly requires that buildings and their ancillary facilities where various distributed photovoltaic power generation projects are located should be within the same land ownership red line. At the same time, Article 14 specifically points out that within the same land property red line, distributed photovoltaic projects shall not add new connection points to the public power grid. The purpose is to prevent the behavior of "increasing connection points to avoid project scale restrictions", that is, to avoid the situation where distributed projects that are essentially "large-scale industrial and commercial" are split and constructed into "general industrial and commercial" distributed projects in the form of multi-point access.

It is worth noting that Article 5 of the "Draft for Soliciting Opinions" stipulates that in cases involving self use, the electricity user and power generation project should be located within the same red line of land ownership (i.e. prohibiting "wall sales of electricity"), or the electricity user and power generation project investor should be the same legal entity. From this perspective, in the context of limited red line scope, there is still room for breakthrough in special circumstances, that is, when the electricity user and the power generation project investor are the same legal entity, they can cross the red line for power supply and allow for "wall construction". On the basis of respecting red line supervision, this clause aims to maintain the flexible deployment characteristics of distributed projects and further optimize the allocation of power resources. However, how to clearly define the "investment party of power generation projects" will be a concern for the new regulations, and it cannot be ruled out that the power party may use a small amount of equity participation in the project company to achieve the purpose of "wall construction" for self use projects.

（3） The internet mode can only be changed "once" within the specified mode range, which may have adverse effects on existing projects

According to Article 15 of the draft for soliciting opinions, except for large-scale industrial and commercial distributed photovoltaic projects, investment entities of other distributed photovoltaic power generation projects are only allowed to change their grid connection mode once when facing changes in electricity user load or adjustments to their own operating conditions. When making changes, the investment entity shall inform the filing authority and update the filing information synchronously, and shall re sign the grid connection agreement and power purchase and sale contract with the power grid enterprise.

Compared with the previous Notice of the National Development and Reform Commission on Improving the Benchmark Electricity Price Policy for Onshore Wind Photovoltaic Power Generation (NDRC Price [2015] No. 3044), the "Draft for Soliciting Opinions" continues to use the requirement of only one change, but the specific form of the change is no longer limited, that is, it is not only possible to change from "self use and surplus electricity grid connection" to "full grid connection", but as long as it is within the scope of the grid connection mode of the corresponding project type, it can be changed by itself.

However, it is important to note that for existing industrial and commercial projects, many of them have experienced situations where property owners have poor credit and default on electricity bills, and even assets have been auctioned off or property owners have gone bankrupt, forcing project investors to switch to a "full online" model. However, the draft for soliciting opinions only stipulates implementation after publication and does not distinguish between old and new projects. In other words, once the relevant content of the "Draft for Soliciting Opinions" is officially released, regardless of new or old projects, any "self use, surplus electricity grid connected" industrial and commercial distributed projects may no longer be allowed to be changed to "full grid connected", which will directly lead to the strong binding between existing industrial and commercial project investors and property owners, and further reduce relief channels.

（1） Simplify project development and construction compliance documents, clarify that there is no need to handle "planning procedures"

Prior to the draft for soliciting opinions, there were no national level regulations that explicitly exempted the "planning procedures" for distributed photovoltaic projects. Exemption regulations only existed at the provincial and municipal levels, and mainly focused on "non-profit distributed photovoltaic projects". Therefore, at present, most compliance measures are still mainly implemented according to the principle of "need to be handled in principle, exceptions are exempted according to local regulations", and in practice, there are few planning procedures for distributed photovoltaic projects, resulting in a disconnect between regulations and reality.

In this regard, Article 20 of the draft for soliciting opinions explicitly states for the first time that the use of existing buildings and their ancillary places can be exempted from procedures such as land pre-approval, planning site selection, planning permission, and energy conservation assessment, provided that they meet the construction requirements. At the same time, for projects that utilize newly constructed buildings and their ancillary facilities, it is advisable to consider installation requirements comprehensively during the building planning, design, construction, and other stages, and handle planning permits and other procedures together.

It can be foreseen that if the relevant content of the draft for soliciting opinions is officially released, the relevant regulations on simplifying project development and construction procedures will be more in line with the actual operational status of distributed photovoltaic projects, which will be conducive to improving project development efficiency and reducing project construction costs.

（2） Optimize the filing mode for non natural person household projects and clarify that they can be "merged for filing"

The release of the draft for soliciting opinions has brought certain benefits to investors in non natural person household projects, mainly reflected in the relevant aspects of the filing mode.

Firstly, Article 12 of the draft for soliciting opinions clarifies the principle of using the investment subject as the filing subject, providing clear guidance for the filing of non natural person household distributed photovoltaic projects. At the same time, for projects that have already been filed by natural persons, there is no need to change the filing subject, but the investment subject should proactively inform the filing authority and power grid enterprises of relevant information, clarify the subject responsible for project operation and maintenance, and corresponding legal responsibilities. Therefore, the draft for soliciting opinions directly grants non natural persons the right to register household projects, which solves the long-standing problem of inconsistency between the investment subject and the registration subject of household projects at the institutional level. It can increase the security of electricity revenue and effectively protect the rights and interests of project investors.

Secondly, considering that non natural person household projects mostly utilize the roofs of self built houses by farmers for the installation of photovoltaic power stations, the overall project presents the characteristics of small single roof capacity and a large and scattered number of power stations. Therefore, Article 14 of the draft for soliciting opinions clearly states that for non natural person household distributed photovoltaic projects, they are allowed to be merged and recorded and separately connected to the power grid. At the same time, in order to avoid the situation of improper splitting of projects, this article also clarifies that the merger filing must meet the following conditions: the investment subject is the same, the filing authority is the same, and the construction site, scale, and content of a single project are clear; In other cases, distributed photovoltaic power generation projects shall not be merged for filing.

（1） Standardize project filing procedures and prohibit improper restrictions or obstacles to project filing

In terms of project access, Article 10 of the Draft for Soliciting Opinions clearly stipulates that the development of distributed photovoltaics should respect the wishes of building property owners. Localities shall not control distributed photovoltaic development resources such as rooftops through franchise operations, and shall not restrict eligible investment entities from participating equally in the development and construction of distributed photovoltaic power generation.

In terms of project filing, Article 11 of the "Draft for Soliciting Opinions" requires that distributed photovoltaic power generation projects implement filing management, and no relevant conditions that violate market fair competition shall be set up in various regions. The filing authority shall follow the principles of convenience and efficiency, file projects in accordance with the law, and shall not arbitrarily increase the requirements for filing documents or exceed the processing time limit to prevent the disguised setting of entry barriers. This regulation explicitly prohibits the filing authority from requiring enterprises to register or establish branches locally, which is expected to further reduce the institutional transaction costs of investment entities.

（2） Emphasizing once again the protection of the legitimate rights and interests of natural persons, to prevent investors in household photovoltaic projects from harming the rights and interests of farmers

As one of the cornerstones of China's laws and policies, putting people first is also reflected in this draft for soliciting opinions. The draft for soliciting opinions constitutes a comprehensive protection of the legitimate interests of natural persons through measures such as protecting their right to know and choose, issuing standard contract texts, and providing financial support.

Firstly, in order to protect the legitimate interests of farmers, Article 10 of the "Draft for Soliciting Opinions" clearly requires that when constructing distributed photovoltaic power generation projects using farmers' residences, the consent of farmers must be obtained, and the legitimate rights and interests of farmers must be effectively protected. No unit or individual may, against the wishes of farmers, forcibly lease and use their residential properties for the construction of photovoltaic projects. This regulation helps to ensure the right to information and choice of farmers, ensuring that they can enjoy their due rights and benefits in participating in distributed photovoltaic power generation projects, and avoiding unfair treatment or losses.

Secondly, in order to protect natural persons from the impact of unfair contract terms, Article 18 of the draft for soliciting opinions proposes the initiative of the National Energy Administration to organize the development of standard contract texts. By regulating the content and terms of contracts, disputes and risks caused by unclear or unreasonable contracts can be reduced, providing natural persons with more fair, transparent, and secure agreement texts. Thirdly, in terms of financial support, Article 36 of the draft for soliciting opinions clearly stipulates that natural persons are exempt from government funds, additional fees, and system reserve capacity fees for household distributed photovoltaic power generation projects. This reduces the economic burden of natural persons participating in household distributed photovoltaic power generation projects and improves the economic and feasibility of the projects.

（3） Clearly propose the establishment of archives and information management to improve project management efficiency

In order to standardize the full lifecycle management of distributed photovoltaic projects, the provisions on filing and information management in this draft for comments are also worthy of our attention. According to Article 16 and Article 37 of the Draft for Soliciting Opinions, provincial energy authorities need to rely on the National Renewable Energy Power Generation Project Information Management Platform to organize the filing and certification of distributed photovoltaic power generation projects. This measure means that every distributed photovoltaic power generation project will have a complete record at the national level. The completion time for project filing and registration is clearly defined as within one month after the project is completed and connected to the grid. The investment entity and power grid enterprise should promptly submit relevant information on the National Renewable Energy Power Generation Project Information Management Platform and the National New Energy Power Consumption Monitoring and Early Warning Platform, fill in and update the content of project filing and registration, in order to ensure the timeliness and accuracy of data.

（1） Encourage various investment entities to participate in investment and operation

Article 3 of the Draft for Soliciting Opinions clearly states that all types of power users, investment enterprises, specialized contract energy service companies, and natural persons who comply with legal provisions are encouraged to develop, construct, and operate distributed photovoltaic power generation projects in accordance with laws and regulations as investment entities. This policy reflects a clear attitude of encouraging all types of investors to actively participate in the development of distributed photovoltaic projects. From this perspective, the draft for soliciting opinions not only encourages the diversification of participants in the photovoltaic industry, but also lowers the threshold for market access by clarifying the participation qualifications of various entities, which helps promote healthy competition in the photovoltaic industry.

（2） Propose again to encourage the BIPV model

Based on technical guidance for photovoltaic projects, the draft for soliciting opinions encourages the use of Building Integrated Photovoltaics (BIPV) construction mode, which makes the photovoltaic modules and the building itself structurally more stable, with stronger wind and earthquake resistance capabilities. At the same time, it can better meet the safety requirements of buildings in terms of waterproofing, lightning protection, and other aspects.

（3） Clearly support project upgrade and renovation

Distributed photovoltaic power generation, as a green energy project, is of great significance to sustainable development. The revised Article 39 also sends a positive signal to encourage project upgrading and transformation. This clause encourages investors to take measures such as technological transformation and equipment recycling and reuse of existing projects, further improving power generation efficiency and energy utilization level. However, upgrading and renovation may involve the issue of re filing, which may affect the original subsidy eligibility of the project in practice. It is recommended that investment entities pay attention to the requirements for project filing while paying attention to the upgrading and renovation of existing projects. They should fully understand and evaluate possible policy changes, communicate with local energy regulatory authorities in advance, clarify whether the subsidy eligibility of the upgraded project will be affected, and how to maintain or regain the subsidy eligibility, in order to minimize the risk of economic losses.

The release of this draft for soliciting opinions aims to regulate and promote the healthy development of distributed photovoltaic power generation projects, in response to the national energy transition and carbon neutrality strategy. The draft for soliciting opinions puts forward clear requirements in refining project types, innovating online models, optimizing procedures, restricting construction red lines, protecting the interests of natural persons, encouraging investment and technological innovation, promoting market transactions and fair competition, and other aspects. We hope that the draft for soliciting opinions will be improved and introduced as soon as possible after widely listening to the opinions of all parties. After the relevant regulations and measures are promulgated, it will not only help promote the market-oriented operation of the distributed photovoltaic power generation industry, ensure the compliance and legality of projects, but also provide clear regulatory and policy support for achieving the optimization of energy structure and environmental protection goals.