The government should limit its average feed-in tariff (FIT) reduction on solar power generation to about 4 percent a year to make the subsidy attractive, which would be key for Taiwan to reach its goal of installing 20 gigawatts (GW) of solar power capacity by 2025, TrendForce Corp (集邦科技) said in a report yesterday.
The goal is part of the government’s efforts to increase energy generated from renewable sources to 20 percent of the nation’s overall power generation by 2025, up from less than 5 percent in 2016, while also abandoning nuclear power altogether and reducing reliance on coal-fired power plants from 45 percent to 30 percent.
The advised 4 percent annual reduction would bring the FIT rate down to NT$4.2472 per kilowatt hour (pkwh) by 2025, which would be an appealing rate to investors in solar power plants, who could still earn reasonable returns of about 5 percent, TrendForce said.
This year’s FIT rate is NT$5.4258pkwh, based on the annual reduction of 4 to 5 percent approved by the Ministry of Economic Affairs, TrendForce said.
The ministry initially proposed slashing this year’s tariff on solar power by as much as 12 percent annually.
“As Taiwan is still in the early stages of energy liberalization, it needs to implement an FIT scheme that will encourage the public to install solar power equipment,” TrendForce analyst Sharon Chen (陳君盈) said in the report.
A rate of NT$4.2472pkwh would mean that “power plant investors will still receive the minimum internal rate of return,” she added.
To manage growing demand for solar power, the ministry raised the ceiling on power generated by solar power installations from this year’s target of 1GW to 1.5GW, TrendForce said.
State-run Taiwan Sugar Corp (台糖), companies in industrial areas and special solar projects can install solar panels on rooftops or on the ground this year, TrendForce added.
Separately, the report said that solar module supplier United Renewable Energy Co Ltd (聯合再生) retained its No. 1 spot in the first half of this year in terms of shipments, although its shipments fell 10 percent from a year earlier.
United Renewable Energy was closely followed by AU Optronics Corp (友達光電), Canadian Solar Inc and Gintung Energy Corp (同昱), while Taiwan Solar Energy Corp (元晶太陽能) saw its ranking climb to No. 5 and could move higher by the end of this year thanks to large orders from Taiwan Power Co (台電), the report said.
Taiwan Solar is helping Taipower install 150 megawatts ground-mount solar systems in Tainan, according to the report.
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