**Abstract**
Recently, the Ministry of Finance released the "Notice on the Liquidation of the Golden Sun Demonstration Project's Financial Assistance Funds," signaling the end of a four-year implementation period for the "Golden Sun" initiative. This development also indicates that China is preparing to shift its photovoltaic (PV) distributed generation subsidy model—from initial investment support to electricity price subsidies. This transition marks an important step in the evolution of renewable energy policy in the country.
**From Initial Investment Subsidies to Electricity Subsidies**
Since the beginning of this year, with the introduction of various national policies encouraging the growth of distributed PV systems, especially rooftop solar installations, the domestic market has seen rapid expansion. This positive trend has brought new hope to many PV companies that were previously struggling. At the same time, as the EU’s preliminary ruling on anti-dumping measures was about to be announced, the industry confirmed that distributed PV would soon benefit from a wind power-style electricity subsidy, drawing attention back to the now-concluded Golden Sun project.
In 2009, the Ministry of Finance, the Ministry of Science and Technology, and the National Energy Administration jointly launched the Golden Sun Demonstration Project, aiming to accelerate the industrialization and large-scale deployment of domestic PV through comprehensive financial support, technological assistance, and market-driven strategies.
The initial investment model of the Golden Sun project, which allowed self-consumption and surplus electricity to be fed back into the grid, greatly encouraged PV developers. According to available data, over 100 MW of projects were approved in 2009 alone, and by 2012, the total capacity had surged to 4,540 MW.
Meng Xianyu, vice chairman of the China Renewable Energy Society, noted that the initial investment subsidies helped build and nurture the domestic PV development chain. Once this stage was fulfilled, it made sense to transition toward electricity price subsidies.
**Opening a Door for Domestic Applications**
For the first time, the Golden Sun project opened the door for large-scale photovoltaic applications in China, serving as a pioneering effort in scaling up PV product usage.
According to statistics, since 2009, the total installed capacity of the Golden Sun Demonstration Projects has exceeded 6,000 MW, accounting for nearly half of the domestic PV market. This not only helped the industry overcome challenges but also created a significant domestic installation market. It also brought substantial energy savings and carbon emission reductions. For instance, with an average of 3.5 hours of sunlight per day, the 6,000 MW of installed capacity could generate approximately 167.58 billion kWh over 25 years, saving around 2.68 million tons of standard coal and reducing CO₂ emissions by about 6.97 million tons—equivalent to roughly 3.8 billion yuan in environmental benefits.
Driven by the Golden Sun project, the installed PV capacity in China grew exponentially. By 2012, China had become the second-largest PV market globally, after Germany.
Experts believe that although the project lasted only four years, it played a crucial role in advancing China's PV industry. It not only accumulated valuable experience in distributed energy development but also laid the foundation for large-scale grid-connected PV systems. Additionally, it contributed to industrial innovation, equipment localization, and cost reduction in PV applications.
**How to Transition**
The direct impact of the Golden Sun policy was the large-scale adoption of domestic PV systems. More importantly, it helped break through the limitations of China's power system in supporting renewable energy, making it easier to integrate distributed power generation into the grid.
With declining construction costs, improved grid access, and more mature business models, the long-anticipated electricity price subsidy policy has finally been implemented. This approach, widely used in Europe and the United States, was one of the key considerations when the domestic market was first introduced. However, due to the unique structure of China’s power grid, authorities initially opted for investment subsidies to stimulate the market and build necessary mechanisms. As the sector matures, a gradual shift to electricity price subsidies is expected.
Xu Honghua, director of the Institute of Electrical Engineering at the Chinese Academy of Sciences, pointed out that investment and electricity price subsidies represent different incentives for different stages of industrial development. The combination of both policies will help sustain the growth of the domestic market. Some PV executives have even suggested extending the Golden Sun project for another three years, during which both subsidy models could run in parallel to further refine a subsidy system better suited to China’s conditions.
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