The new edition of the Guidelines for Assessing the Carrying Capacity of Distributed Generation Resources Connecting to the Power System by the National Energy Administration took effect on June 18th. A crucial change is the removal of the 80% cap on the reverse load rate of transformers as an access threshold. The industry widely believes this policy addresses a long-standing "bottleneck" restricting the grid connection of distributed photovoltaic (PV) systems, potentially unleashing approximately 50 gigawatts of pent-up installation demand and unlocking a market worth hundreds of billions of yuan.
What Led to the Removal of the Access Threshold?
Distributed photovoltaics are a primary form of distributed generation, typically involving the installation of PV panels on idle resources like industrial park rooftops or rural land for local consumption, with surplus electricity fed into the grid or sold entirely.
Previously, grid connection for distributed PV required meeting the condition that the "reverse load rate of the transformer must not exceed 80%." This meant that when electricity from the PV system was fed into the grid, the transformer's load capacity could not surpass 80%; otherwise, the area would be classified as a red zone, prohibiting new distributed PV grid connections. This rule was initially intended to prevent transformer overload and line faults, ensuring the safety of the distribution network.
The new policy abolishes this static threshold control, shifting towards a dynamic and flexible assessment mechanism. "Now, digital systems and intelligent algorithms are used to dynamically evaluate grid load pressure," explained Hu Mingxuan, Deputy Chief Engineer of the Components Business Division at Shenzhen Skyworth PV Technology Co., Ltd. If the load exceeds 80%, there is an opportunity to achieve new PV grid connection by using supporting energy storage facilities to locally consume excess power or by expanding transformer capacity.
"Driven by the 'dual carbon' goals, the large-scale growth of distributed PV installations nationwide has made the old standard inadequate for current new energy development needs," stated Wang Fulai, President of the Southern Regional Management Center at Trina Solar's Residential Energy Business Unit.
Areas with early development and high penetration of distributed PV were most constrained by this limit. "In regions like Shandong, Hebei, Jiangsu, and Zhejiang, many high-quality rooftop resources and industrial parks with high electricity loads only briefly exceed the limit during midday peak PV generation hours. Even with sufficient local electricity consumption capacity at other times, projects were forced to delay grid connection," revealed a relevant person in charge at Zhongzi Technology Co., Ltd., noting that many of the company's earlier projects were stalled for this reason.
Rural areas also require policy relaxation. Hu Mingxuan gave an example: in some rural areas, transformer capacity is only 200-400 kVA, allowing a maximum of just over 10 households per village to connect PV projects, resulting in a coverage rate below 10%. Many villagers have installation demand but cannot apply.
China's 15th Five-Year Plan explicitly proposes building a strong energy nation, with key focuses on "strengthening the local development and utilization of distributed energy" and "striving to build a new type of power system."
"In the short term, a large volume of distributed PV installation demand across the country is stuck at the grid connection stage, estimated at around 50 GW," Hu Mingxuan said. This volume is close to one-third of the new distributed PV grid-connected capacity added nationwide last year. In the medium to long term, with the advancement of dynamic flexible management mechanisms and distribution network upgrades, the potential for new distributed PV installations is expected to be continuously unlocked.
Sichuan's Late-Mover Advantage is Evident
Compared to early-developing regions for distributed PV like North China and the Jiangsu-Zhejiang area, Sichuan started relatively late, with relatively low penetration. Data from the National Energy Administration shows that in 2025, Sichuan's new PV grid-connected capacity was 8.978 GW, of which distributed PV accounted for 4.651 GW, representing 2.84% and 3.04% of the national totals, respectively.
Xu Guoliang, General Manager of Deyang Yuechuan New Energy Co., Ltd., provided a comparative set of data: in Shandong and Henan, distributed PV coverage in industrial parks reaches 70-80%. In Sichuan, however, coverage for commercial and industrial distributed PV in areas with high industrial electricity loads like Chengdu, Deyang, and Mianyang is currently around 20%, with most other regions in the province below 10%.
Although overall sunlight conditions in the Sichuan Basin are not as favorable as in regions like Shandong and Henan, interviewees generally believe Sichuan possesses a late-mover advantage in developing distributed PV.
"On one hand, Sichuan's high-energy-consuming enterprises like computing power centers, electrolytic aluminum, and lithium battery plants have a strong demand to reduce costs. On the other hand, Sichuan's full push for green and low-carbon development can effectively drive the growth of distributed PV development demand," Wang Fulai stated. His company has already built multiple distributed PV projects in places like Yibin, Meishan, and Luzhou, and Sichuan is currently its fastest-growing and top-priority domestic market.
Furthermore, Sichuan has a complete PV industry chain, with its comprehensive PV product production capacity ranking among the top three nationally. With continuously declining PV module prices, utilizing rooftop resources for distributed PV development has mature conditions for implementation.
In recent years, Sichuan has strongly supported distributed PV development. As early as 2024, Sichuan proposed accelerating the implementation of commercial and industrial distributed PV projects, striving for industrial park rooftop PV to be built wherever possible, and simplifying the filing process. In 2025, Sichuan issued a new policy implementing the "Sunshine for Thousands of Households Action," specifically requiring that for general commercial and industrial projects and adjusted large-scale projects in the "Three Prefectures and One City" (Aba, Ganzi, Liangshan, and Panzhihua), the annual proportion of self-generated and self-consumed electricity should, in principle, not be less than 50%.
"The Pearl River Delta, Yangtze River Delta, and Sichuan-Chongqing region will become the core areas for incremental distributed PV growth this year," Wang Fulai said. In the long run, as PV penetration continues, the distribution network is upgraded, and energy storage costs gradually decline, the benefits of the new policy will become significantly apparent in Sichuan.
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