With the conclusion of May 31, under the guidance of policies, the distributed photovoltaic market has entered a brand-new development cycle.

As of now, among the 17 provincial distributed photovoltaic management measures that have been issued or are in the draft for public comment, 11 provinces require that the proportion of self-use by general industrial and commercial users be 50% to 90%, while only 6 provinces have not yet made such a requirement.

Under the background of Document No. 136, even for projects that allow full grid connection, electricity prices will face an increasingly downward trend.

In the next step, in the distributed photovoltaic market, consumption has become a key factor for project implementation. Traditional rooftop and channel resources are gradually shifting towards a development model centered on load consumption, and the revenue urgently needs more added value to be reflected.

The two-way increase in consumption and electricity prices

The cancellation of the full grid connection for commercial and industrial photovoltaic power in the new distributed photovoltaic management measures aims to promote the return of distributed photovoltaic power to the development principle of local consumption. Coupled with the full photovoltaic power entering the market promoted by Document No. 136, this means that consumption is not only the core of project implementation but also a key factor in the project’s revenue level.

Judging from the recent bidding situation of distributed photovoltaic projects, there are almost no tenders for household photovoltaic projects, while all commercial and industrial photovoltaic projects are carried out in the mode of self-generation and self-consumption plus surplus power fed to the grid, and the proportion of self-consumption is almost all above 50%. Electricity prices are divided into two settlement models. One is the EMC fixed electricity price, ranging from 0.25 to 0.5 yuan per kWh. The other is the weighted average electricity price of the time-of-use electricity price with a discount.

Compared with the average settlement price of photovoltaic power in the electricity market, photovoltaic companies have observed from third-party power trading institutions that the average transaction price of photovoltaic power in various provinces in 2024 will basically fall within the range of 0.2 to 0.4 yuan per kWh, while the photovoltaic electricity price will continue to decline in 2025.

For instance, in the Inner Mongolia West market, the average spot price of photovoltaic power in 2024 was 0.289 yuan /kWh. However, according to the information disclosed in May 2025, the average spot settlement price of photovoltaic power in April was 0.16 yuan /kWh. In addition, Jiangsu and Guangdong, as major provinces in distributed photovoltaic power, also saw a downward trend in their electricity price levels in 2025. For instance, the medium and long-term contract electricity price in Jiangsu Province dropped from 0.395 yuan /kWh in April to 0.31 yuan /kWh in June.

It should be emphasized that due to its small and scattered nature, distributed photovoltaic power generation has insufficient ability to participate in power market transactions and is more likely to passively accept the average price of the power market. This means that its settlement electricity price is likely to be lower than the two electricity price settlement models mentioned above.

Therefore, behind the new policies on distributed photovoltaic and the new policy on full electricity entry into the market, higher consumption to a certain extent means higher base electricity prices. Whoever masters more consumption resources will have more space for project selection. Distributed photovoltaic has also ushered in an era where consumption is king, and some distributed photovoltaic developers are already actively changing their development strategies.

Model innovation behind resource competition

In fact, the growth of the distributed photovoltaic market to its current scale is inseparable from the impetus of the investors behind the developers. However, the uncertainty of returns brought about by the new policies has led to the contraction of investors. Photovoltaic developers have begun to innovate their models to reduce costs or increase added value, and then introduce investors with different risk preferences to proactively adapt.

Meanwhile, the reduction of non-technical costs such as resource fees and roof rental fees under policy guidance can ensure the continuous implementation of projects. However, this may lead to the loss of sales representatives. How to balance market growth and cost control is a new challenge for distributed photovoltaic enterprises.