New Era of Photovoltaic Investment: Analyzing the Impact of the ‘136 Document’ Across 27 Provinces

With the gradual implementation of the detailed rules for the “Document No. 136” across various provinces, a new era of photovoltaic investment has officially begun. The market mechanism is now replacing policy guarantees, becoming the main theme of industry development. As of the end of September 2025, 27 provinces in the country have either issued or are in the process of formulating implementation plans for the National Development and Reform Commission’s “Notice on Deepening the Market-oriented Reform of New Energy Grid Pricing to Promote High-Quality Development of New Energy” (Document No. 136). These details show significant differences in key dimensions such as the classification of existing and incremental projects, pricing mechanisms, and execution timelines, marking a critical transition for the new energy sector from “policy-driven” to “market-driven.” Understanding these differentiated policies is crucial for avoiding risks and seizing opportunities in photovoltaic power projects, particularly in distributed solar investments, construction, and operations.

1. Overview of National Policy Implementation

As of September 25, 2025, 27 provinces and municipalities have introduced documents or sought opinions regarding the implementation rules of Document No. 136, signaling the comprehensive implementation stage of the market-oriented reform of new energy pricing. Among the regions, 18 provinces and cities, including Fujian, Hebei, Guangdong, Ningxia, Heilongjiang, Inner Mongolia East, Inner Mongolia West, Shanghai, Xinjiang, Shandong, Gansu, Yunnan, Hubei, Sichuan, Jiangxi, Hainan, Liaoning, and Anhui, have issued formal documents. Meanwhile, Guangxi, Chongqing, Guizhou, Anhui, Shaanxi, and Zhejiang are still in stages of seeking opinions, interim measures, or discussions. The differences in the progress and depth of these detailed rules reflect the uneven development of electricity markets and new energy resources across regions. Such disparities necessitate more regional considerations in photovoltaic investment decisions, rendering a simple nationwide investment model ineffective.

2. Classification Rules for Existing and Incremental Projects

Each province has designated June 1, 2025, as the baseline for classifying existing and incremental projects, yet specific identification criteria vary slightly. For instance, Hebei province clearly states that all centralized and distributed renewable energy projects that achieve full-capacity grid connection after June 1, 2025, are considered incremental projects, excluding solar thermal projects and offshore wind and solar projects that have undergone competitive allocation. Guangdong province provides a more detailed classification for existing projects: municipal energy authorities are responsible for listing existing renewable energy projects of 10 kV and above, while those below this threshold depend on the project’s grid connection date. Most provinces have adopted relatively gentle transition policies for existing projects. For example, in Guangdong, the upper limit on the mechanism electricity ratio for existing projects is based on voltage level: for projects below 110 kV, the upper limit is set at 100%. For centralized solar projects above 110 kV added after January 1, 2025, the upper limit is set at 50%, while for other projects, it is capped at 70%. Incremental projects, on the other hand, will fully engage in market competition. Hebei province stipulates that large commercial distributed solar projects that commence operations after June 1, 2025, must market all grid-connected electricity except for self-consumed power.

3. Analysis of Pricing Mechanism Differences

The pricing mechanism presents the most significant variances among provincial regulations, directly relating to project revenue expectations and investment feasibility. The mechanism pricing for existing projects in different provinces benchmarks against local coal power prices but shows substantial range differences. For example, Hunan and Guangdong have the highest pricing at 0.45 yuan/kWh, while Shandong’s is 0.3949 yuan/kWh (including tax). In contrast, regions like Xinjiang, Inner Mongolia West, and Ningxia have rates as low as 0.25-0.28 yuan/kWh. This disparity reflects fundamental differences in regional electricity supply and demand conditions and energy structures. Most provinces employ a bidding mechanism for incremental projects, with price ranges from 0.15 yuan/kWh to 0.45 yuan/kWh. Guangdong has set different bidding upper and lower limits for various types of incremental projects: for offshore wind projects, it ranges from 0.2 to 0.6 yuan/kWh; for other wind projects, from 0.2 to 0.453 yuan/kWh; and for solar projects, from 0.2 to 0.453 yuan/kWh. Hebei province utilizes a marginal clearing method to determine eligible projects and electricity volumes, with the mechanism price based on the highest bid among selected projects, not exceeding the bidding cap. If the amount of electricity cleared does not meet the adequacy requirements, the total mechanism electricity volume will be reduced accordingly.

4. Execution Timelines and Electricity Arrangements

Provinces exhibit diverse characteristics in arranging execution timelines for new energy projects, reflecting a “local conditions” policy approach. Most existing projects have a lifespan execution period based on reasonable utilization hours or a 20-year execution period, providing long-term stable policy expectations for the market. In contrast, the execution period for incremental projects is generally shorter: in Hebei, it is set at 10 years for wind projects and 12 years for solar projects, while offshore wind and solar projects have an execution period of 14 years. In Guangdong, offshore wind projects have a 14-year execution timeline, while solar projects are set at 12 years. In Inner Mongolia East and West, there are no fixed guaranteed periods for incremental projects, leaving it entirely to market determination. For the mechanism electricity arrangements of incremental projects, most provinces introduce a dynamic adjustment mechanism based on last year’s completion results. The differences in ratios across regions are significant: Ningxia only allows 10%, while Liaoning permits 55%, Anhui allows 85%, and Hainan allows 75% to 80%. Hebei province stipulates that the application scale for a single project generally should not exceed its total grid-connected electricity, with the current maximum application scale ratio set at 80%.

5. Characteristics of Distributed Solar Policies

As a vital component of new energy development, distributed solar projects have received special attention in the regulations of various regions, with a focus on precision and differentiation. In the implementation plan for Fengshun County, Meizhou City, Guangdong province, it is explicitly stated that support will be provided for distributed solar projects to participate in green electricity and green certificate trading to gain corresponding benefits. In terms of taxation, photovoltaic projects that meet the conditions and standards outlined in the “Public Infrastructure Project Corporate Income Tax Preferential Directory” enjoy a “three exemptions and three halved” income tax policy. Hebei province has made special provisions for distributed solar projects, allowing agents to bid on behalf of distributed renewable energy projects. Currently, bidding agents for distributed projects must be registered and publicly listed electricity sales companies at the Hebei and Jibei power trading centers. The total capacity of the projects represented by agents must not exceed 100,000 kW in both Hebei South Grid and Jibei Grid. Regarding grid connection conditions, Fengshun County has clarified that self-consumed electricity from distributed solar power generation is exempt from additional fees like renewable energy pricing surcharges and government funds for major water conservancy projects. Distributed solar projects will not incur system reserve capacity fees or other related grid service charges. Seventeen provinces have already introduced new policies for distributed solar power, with differentiated requirements for self-consumed ratios becoming a core consideration for regional investment decisions. For instance, seven provinces, including Shandong and Shanxi, stipulate that the self-consumption ratio for general commercial and industrial projects must not be below 50%. In contrast, six provinces, including Fujian and Zhejiang, currently do not impose strict ratio limits, allowing large commercial projects to connect at 220 kV.

6. Directions for Energy Storage Policy Adjustments

Another significant change resulting from Document No. 136 and the implementation rules is the adjustment of energy storage policies, shifting from “mandatory storage” to “market-driven” approaches. Thirteen regions, including Guangdong, Hainan, Hebei, Qinghai, Beijing, Liaoning, Ningxia, Gansu, Shanxi, Heilongjiang, Anhui, Shaanxi, and Zhejiang, mention energy storage in their rules, albeit with different expressions and emphases. Among these, Guangdong, Shanxi, Hebei, Beijing, Shaanxi, and Anhui emphasize that energy storage should not be a prerequisite for the approval or grid connection of new energy projects, with some provinces encouraging resource regulation through leasing arrangements. Liaoning’s implementation plan proposes the establishment of scientific capacity compensation and cost compensation mechanisms that provide compensation based on the contributions of system capacities provided by coal power and grid-side new energy storage. Beijing offers certain mechanism electricity support to new energy stations that have signed energy storage leasing contracts (agreements) before June 1, 2025, or have built energy storage facilities. Energy storage projects leased and built and grid-connected by December 31, 2025, can receive 36 months of mechanism electricity policy support for new energy stations. This policy trend positions shared energy storage as a mainstream path for scaling down costs in new energy projects. The industry anticipates that by 2027, the share of shared energy storage will increase from 35% in 2024 to 60%. In provinces like Shandong and Zhejiang, where price differences exceed 0.8 yuan/kWh, shared energy storage stations maximize profits through a “leasing + arbitrage” model.

7. Innovations in Market Mechanism Construction

Innovations in the construction of electricity market mechanisms across regions have created more diverse pathways for new energy participation in market transactions. Liaoning’s implementation plan highlights eight key features in market development, including enhanced flexibility in mid- to long-term transactions, allowing autonomous selection of priority in green electricity and mechanism electricity settlements, and steadily advancing the day-ahead market construction in stages. In the realm of mid- to long-term trading, Liaoning permits trading parties to not only autonomously agree on settlement reference points but also to determine the formation method and calculation cycle of the settlement reference point price. This design completely breaks the traditional limitation of a “single, fixed” reference point for mid- to long-term contract settlements. Regarding green electricity trading, Liaoning has innovatively designed a priority choice mechanism for settling green electricity transactions and mechanism electricity. If parties prioritize settling green electricity transactions corresponding to green certificate revenues, they must reach an agreement and submit a written settlement entrustment letter to the grid company. Xinjiang promotes fair participation of new energy in real-time markets, accelerating voluntary participation in day-ahead markets. When the electricity spot market runs continuously, mechanism electricity does not participate in mid- to long-term market or day-ahead market settlements. Inner Mongolia East promotes all new energy electricity to participate in the real-time market after the spot market operation.

8. Investment Strategy Recommendations for Photovoltaic Projects

In light of the comprehensive rollout of the implementation details of Document No. 136, investment in photovoltaic power projects requires more refined and region-specific strategies. Regarding regional selection strategies, investment should prioritize areas where the spot market is mature, as seen in Shanxi and Guangdong, which have established continuously operating electricity spot markets. Large commercial projects can participate in market transactions through excess electricity fed into the grid and hedge against price volatility with time-based contracts. Data shows that peak period electricity prices in Shanxi are 20% higher than the benchmark price, providing additional revenue opportunities for projects. In the East China region, Jiangsu, Zhejiang, and Shandong exhibit high policy flexibility and robust grid absorption capacity, making them suitable for distributed solar investments. In contrast, the northwest regions, such as Qinghai and Gansu, showcase potential in centralized fields driven by resource endowments and innovative green electricity scenarios. For distributed solar projects, it is essential to focus on the differing self-consumption ratio requirements across regions. In provinces like Shandong and Shanxi, where the self-consumption ratio must not be lower than 50%, sufficient self-load or surrounding absorption capacity must be secured before investment decisions. In provinces like Fujian and Zhejiang, which do not impose strict ratio limits, large commercial projects can be developed more flexibly. On the technical route, attention should be given to the integration of “photovoltaics + energy storage.” With the maturation of shared energy storage models, configuring energy storage capacity through leasing can significantly alleviate initial investment pressures. In provinces like Shandong and Zhejiang, where there are significant price differences between peak and off-peak periods, energy storage can further enhance overall project returns through peak-off-peak arbitrage. Market mechanisms are replacing administrative directives and becoming the core force guiding the photovoltaic industry. Companies that can accurately grasp regional policy differences, flexibly adjust investment strategies, and continuously enhance market operational capabilities will gain a competitive edge in the next round of industry reshuffling. For investors in distributed solar projects, focusing on regions with strong policy support, mature electricity markets, and good absorption conditions while targeting projects with high self-consumption ratios and actively exploring diversified revenue models, including photovoltaics and energy storage and green electricity trading, will be effective strategies for addressing market changes.