The announcement of subsidy phase-out led to a larger energy “rebound effect”. They adjusted electricity usage patterns to maximize revenue from solar electricity. With the impending post-subsidy era, the Chinese government has initiated significant reductions in household photovoltaic (PV) subsidies.
To test our argument, we use the case of the PV generation subsidy phase-out policy in China. China is the world's largest PV market, and the household PV industry has heavily relied on subsidy-based business models (Xiong and Yang, 2016).
With the impending post-subsidy era, the Chinese government has initiated significant reductions in household photovoltaic (PV) subsidies. This policy change may have negative implications, such as the emergence of the “solar rush” phenomenon.
This is due to the transition of China from a planning system to a market system. First, as we analyzed in Section 3, the number of Chinese PV policy is large. China is a quick policy learner that can follow the international policy experience and import them to China. However, Chinese PV solar policy is lack of strategic policy research.
The most significant reduction in household PV subsidies occurred in December 2017. The Chinese government announced a subsidy reduction of 0.05 RMB/kWh for household PV generation after January 2018. This means that households that installed and used PVs after 2018 had to accept lower PV generation subsidies of 0.37 RMB/kWh.
However, based on the limited studies on China’s solar PV policies, the literature only lists China’s existing PV solar policies , , which cannot explain the dynamic trajectory of Chinese solar policy and its relation to the development of the industry.