On February 9, 2025, China's National Development and Reform Commission and the Energy Bureau issued the "Notice on Deepening the Market-based Policy of New Energy Grid-connected Electricity Prices to Promote the High-quality Development of New Energy", also known as the "531 New Photovoltaic Policy". This policy has made important adjustments to the development direction, subsidy mechanism, market management, etc. of the photovoltaic industry. The following is the core content and interpretation of the policy:

I. Core Content of the Policy

1. Subsidy reduction and market-oriented transformation. It is clear that PV subsidies will be gradually reduced. Newly registered centralized PV power stations and industrial and commercial distributed projects in 2025 will no longer enjoy central government subsidies and will implement grid parity (relying on local or market-oriented support). Household distributed PV may retain some local subsidies, but subsidies at the national level will be greatly reduced.

2. Prioritize the consumption of photovoltaic power and strictly control the abandonment rate. Grid companies are required to give priority to the consumption of photovoltaic power generation, suspend the approval of new projects in areas where the abandonment rate exceeds 5%, and force the matching of energy storage and the flexibility transformation of the power system.

3. Strengthen project management and curb disorderly expansion. New projects must be included in the provincial energy plan and matched with the grid construction and consumption capacity to avoid blindly launching projects that lead to waste of resources. Projects must be started within one year after filing, otherwise they will be disqualified.

4. Encourage distributed and "photovoltaic +" models. Promote the development of distributed photovoltaics on industrial and commercial roofs, support composite projects such as "photovoltaic + agriculture" and "photovoltaic + energy storage", and optimize land use efficiency.

5. Upgrade technical standards. Improve technical requirements such as component efficiency and system stability, eliminate inefficient production capacity, and promote the industry's transformation to new technologies such as high-efficiency N-type batteries and perovskites.

2. Impact on the Industry

1. Short-term pain. Companies that rely on subsidies face survival pressure, small and medium-sized manufacturers may accelerate their exit, and industry concentration will increase.

2. Long-term positive. Market competition promotes technological innovation, and the fields of energy storage, intelligent operation and maintenance, and high-efficiency components (such as TOPCon and HJT) benefit. Distributed photovoltaics and the "photovoltaic + energy storage" model have become new growth points.

3. Differentiation of the industrial chain. Competition in upstream silicon materials and silicon wafers has intensified, while downstream power station operations have focused more on cost control and electricity market trading capabilities.

三、Suggestions for companies to respond

1. Accelerate technology upgrades. Turn to high-efficiency technologies such as N-type cells and perovskites to reduce the levelized cost of electricity.

2. Develop energy storage and integrated energy services. Solar-storage integrated projects can improve consumption capacity and electricity price benefits, and participate in the electricity spot market.

3. Pay attention to local policies and overseas markets. Some regions may provide local subsidies or green electricity trading discounts, and overseas demand (such as the Middle East and Southeast Asia) still has potential.

The 531 new policy marks the comprehensive shift of China's photovoltaic industry from "policy-driven" to "market-driven", and promotes high-quality development of the industry by strictly controlling scale, strengthening consumption, and encouraging technology upgrades. Although it may cause an industry reshuffle in the short term, it will be beneficial to enhance global competitiveness and sustainable development capabilities in the long run.

1. Accelerate technology upgrades. Turn to high-efficiency technologies such as N-type cells and perovskites to reduce the levelized cost of electricity.

2. Develop energy storage and integrated energy services. Solar-storage integrated projects can improve consumption capacity and electricity price benefits, and participate in the electricity spot market.

3. Pay attention to local policies and overseas markets. Some regions may provide local subsidies or green electricity trading discounts, and overseas demand (such as the Middle East and Southeast Asia) still has potential.