Distributed photovoltaics (PV) in China have developed rapidly, becoming a significant component of newly added renewable energy power, with continuous breakthroughs of installed capacity. However, alongside this rapid growth, limitations on grid access have become one of the key factors restricting the further development of distributed photovoltaics.

By the end of 2024, Shandong Province had the largest installed capacity of household distributed PV systems in China, accounting for 19% of the national total. Zhejiang Province ranked first in commercial and industrial distributed PV, with a 15% share. According to the publicly available data on distributed PV grid hosting capacity across provinces, Zhejiang and Shandong have shown relatively favorable conditions for grid connection and consumption of distributed PV. As of December 2024, the number of restricted counties (districts/cities) publicly disclosed in Zhejiang accounted for 14% of the province’s 90 counties (districts/cities). In Shandong Province, the number of counties with restricted developable capacity for distributed PV accounts for 27% of all counties in the province, which is lower than Henan’s 50%. In Hebei, the developable capacity is zero, with 100% of the region classified as restricted.

Shandong and Zhejiang as household and industrial and commercial distributed PV installed capacity is the largest, and at the same time is distributed PV grid connection and consumption of the province of the light constraints, the main reason is what? In this paper, we plan to take Shandong's household distributed and Zhejiang's industrial and commercial distributed as a typical case study to find the answer through the following two questions:

  • What are the main development modes of household distributed PV in Shandong Province and industrial and commercial distributed PV in Zhejiang Province: the roles and benefits modes of each participant, and what are the grid-connection and consumption modes adopted under this development mode?
  • What are the main driving factors for each participant in the promotion of household and industrial/commercial distributed PV from the perspectives of policy measures, technological innovation, and economic returns?

This report focuses on the study through field research and semi-structured interviews with farmers, enterprises and development operators involved in distributed PV development. Through the interviews, mapping the development mode of distributed PV in typical provinces, understanding the driving factors for the participation of each subject party, summarizing the measures taken to promote distributed PV grid connection and consumption. The research finds that: firstly, distributed photovoltaic (PV) stations need to return to the primary characteristics of self-generation and self-consumption; Secondly, higher profits drive sustainable development and application of distributed PV while user-side storage technologies expand application scenarios for residential and commercial distributed PV, enabling multiple channels for revenue generation. Finally, governments play a crucial role in the development of distributed PV.

Based on the above findings, this research proposes the following suggestions for the development of distributed photovoltaics:

  • Encourage the application of digital and intelligent innovative technologies to increase the proportion of self-generation and local consumption.
  • Expand the application models of scenarios for distributed photovoltaics and improve the benefits levels for developers.
  • Facilitate the implementation of relevant policies to integrate distributed photovoltaics into the electricity market, guided by the market for further development.