CITIC SEC: After the new regulations are implemented, the development of distributed photovoltaics is expected to slow down appropriately.

CITIC SEC released a research report stating that the contradiction of distributed photovoltaic grid connection and consumption is becoming increasingly prominent. Under the new regulations, factors such as supply and demand environment, consumption conditions, and grid access capacity may limit or slow down the growth rate of distributed photovoltaic installations. Large-scale commercial and industrial distributed photovoltaics can only export surplus electricity in the spot operation area, and overall electricity prices may decline, dragging down project returns and helping to ease investment overheating. Third-party participation in peer-to-peer electricity sales through source-grid-load-storage models has not yet received policy approval and needs to wait for breakthroughs in subsequent policy revisions. New distributed photovoltaics must meet the requirements of the "four capabilities," and new digital and intelligent requirements such as power prediction are expected to be rapidly released in the distributed field. Event: In order to alleviate the increasingly serious contradiction of distributed photovoltaic grid connection and consumption, and to promote the healthy and sustainable development of the industry, the National Energy Administration recently revised and issued the "Management Measures for the Development and Construction of Distributed Photovoltaic Power Generation," which made provisions on the overall planning, record management, construction management, grid access, and operation management of distributed photovoltaics. CITIC SEC's main points are as follows: Considering the new scale of consumption regulation and grid capacity control, the growth rate of distributed photovoltaics may slow down In recent years, driven by factors such as policy support, technological progress, and capacity expansion, the domestic distributed photovoltaic installed capacity has shown a continuous acceleration trend. The new distributed photovoltaic installed capacity from 2022 to 2024 is expected to be 0.5/1.0/1.2 gigawatts. The rapid expansion of distributed installations has led to the gradual exposure of the problem of insufficient grid access and consumption capacity in some regions. Therefore, in 2023-2024, provinces such as Jiangxi, Shandong, Liaoning, Hubei, and Henan have issued policies restricting, prohibiting, or temporarily delaying the construction of distributed photovoltaic projects. The new "Management Measures" stipulate that local energy authorities should control the scale of distributed photovoltaic development based on the local power supply and demand situation, system consumption conditions, grid access capacity, and other factors to avoid excessive investment leading to installation growth beyond local demand and capacity. Considering that the infrastructure of the current distribution network in China is still relatively weak, the improvement in grid access capacity for distributed photovoltaics will take some time. We expect the expansion rate of distributed photovoltaic installations to slow down starting in 2025. Large projects are restricted from exporting surplus electricity, and the comprehensive electricity price may be impacted by market-based trading The new "Management Measures" adjust the rules of various entities' investment in the grid-connected model of distributed photovoltaics. In principle, large commercial and industrial photovoltaics are self-consumption only, and surplus electricity can only be exported in electricity spot market operation areas. Considering that the output curve of photov oltaic projects in the spot m