The Solar Sell – China

February 2005

With the largest population in the world and a rapidly growing economy, China faces many problems with electricity supply. Not only is the existing coal-powered electricity grid damaging the environment, it is also failing to meet the needs of millions of rural dwellers. The Chinese Renewable Energy Development Project, implemented by the World Bank’s Asia Asia Sustainable and Alternative Energy Programme (ASTAE), is acting to help resolve this problem. By advocating and supporting the adoption of good quality solar home systems, the aim is to provide a reliable, environmentally sound source of electricity to those who have been left without.

Renewable China

Environmental and economic pressures are encouraging China to seek ways to restructure its energy supply. China is the second largest coal-user in the world, behind only the United States. Annual health and agriculture losses associated with coal-related air pollution in China are estimated to be as high as 6 per cent of its GDP (gross domestic product).

Moreover, at the beginning of the 21st century, an estimated 1.6 billion people still lack access to electricity. If we do not quicken the pace of electrification, the number of people without access to electricity will increase. Where traditional, grid-based electrification alone is not feasible, people are looking to alternative options. One such option is photovoltaic (PV) systems, because they are small scale, decentralised, and are the least costly in many locations. PV is also clean; by avoiding the use of fossil fuels for electricity generation and kerosene for lighting, it is good for both the local and global environment. High-quality PV systems are reliable, convenient, and affordable.

China’s renewable energy industry has grown steadily over the last decade, and a principal target of technological advance­ment has been rural village- and household-scale power systems. Nationally, almost 97 per cent of Chinese households have access to electricity and yet there are still 30 million people, primarily those in areas remote from the power grid, who lack access. To address this need, PV-based village systems pro­vide a cost-effective, and often more reliable, alternative to grid exten­sion in these areas. These systems have been the focus of Chinese rural electrification initiatives in recent years.

Renewable Energy Development Project

The World Bank’s Chinese Renewable Energy Development Project has backed the use of PV in rural China. The project design is based on a market-driven approach to renewables, which undertakes the following:

  • Focus on promoting commercial or near-commercial applications;
  • Combines international advances in technology with proven Chinese low-cost production capabilities;
  • Taps the large potential demand by lowering costs and improving products, system reliability, and consumer services.

The project aims to foster development of a sustainable market for PV technologies capable of supplying electricity in an environmentally sustainable way. This provides modern energy to dispersed rural households and institutions. To achieve this, the PV part of the project (the project also includes wind generated electricity) consists of the following two components:

  • The supply of a total of 10 megawatts via PV systems to 300,000-400,000 households and institutions in remote areas of six north-western provinces. A direct grant is provided to PV system companies to assist them to market, sell and maintain PV systems in Qinghai, Gansu, Inner Mongolia, Xinjiang, Xizang, western Sichuan and adjacent areas. The systems are aimed mostly at rural households and institutions without access to electricity, to provide power for lights, radios, televisions, and other appliances. The companies that sell PV systems receive a grant of US$1.50 per watt of PV capacity for every system with a capacity of 10 watts or greater. This financial support helps local companies to improve PV product quality, improve warranties and after-sales services, strengthen business capabilities, and increase marketing efforts. The direct grants are complemented by support to the companies to assist PV market development. A Project Management Office (PMO) manages the programme, which works to overcome barriers and develop markets for PV through activities such as public information campaigns; capacity building to improve commercial capabilities of PV companies; a study to investigate the opportunity for increased affordability; market monitoring, obtaining feedback from producers and consumers; and other activities such as small-scale demonstrations in high visibility areas.
  • Support for technology upgrading to improve the performance and reduce the costs of solar PV technologies in China. Financial assistance to PV industries is provided through grant-assisted technology improvement projects, which share up to 50 per cent of improvement costs; production investment projects assisted by loans to help pay for production equipment, follow-up or other investments; technical assistance for programme management and institutional strengthening activities.

Gansu Province Home Solar System Development

Gansu, a western province featuring a land area of 455,000 km², faces an acute shortage of water resources, sparse vegetation, and serious water and soil loss. Given these circumstances, hydropower options are limited to the large-scale plants built on the vast Yangtze River (also known as the Yellow River). For small, remote communities gaining access to the electricity generated by these large-scale plants is problematic because of a lack of infrastructure and low income levels. Therefore, the World Bank’s Renewable Energy Development Project has focused on the area in the development of household solar systems.

A home solar system can be defined as a small, self-sustaining photovoltaic system that consists of one or more solar modules, a battery and several 12-volt direct current (dc) appliances. During daylight, the battery is charged. The stored energy can be used for generating light and running appliances such as radios and televisions. When the battery is fully charged, the regulator disconnects the module in order to prevent the battery from becoming damaged. This is called ‘high voltage disconnect’ (HVD). Below a certain level of discharge, the battery can also be damaged. To prevent this, ‘low voltage disconnect’ (LVD) occurs before the battery is completely drained.

© David Grimshaw/ITDG
© David Grimshaw/ITDG


  1. The PV module
    The solar PV module is the most reliable component of a home solar system. The output of a solar PV module is affected by the quality of the cells and the temperature of the module. Home solar systems are not thermal systems, which means that if the temperature gets too high, the output of the solar module is negatively affected. A normal module will have a temperature co-efficient of about –2.5 mV/ºC/cell. This means that for every 1ºC increase in temperature, each cell will decrease in output by 2.5 mV.
  2. Module support structure
    The support structure should be corrosion-resistant (e.g. galvanised steel, stainless steel) and electrolytically compatible with materials used in the module frame, fasteners, bolts etc. The term ‘electrolytically compatible’ refers to the way in which certain metals create a current between them when in contact. This can accelerate corrosion of the metal and should be minimised by choosing compatible metals.
  3. Battery charge regulator
    The charge and load controller prevent system overload or over-charging. For safe, reliable operation and to enhance usability, the design should include:

    • A low voltage disconnect (LVD);
    • A high voltage disconnect (HVD);
    • System safeguards to protect against reverse polarity connection and lightning surges;
    • A case or cover that keeps out moisture and insects and prevents temperature extremes;
    • An LED display to show battery charge level (with three lights for empty, charging and full);
    • Capability of supporting added modules and circuits, and larger terminal strips;
    • A fail-safe mechanism to shut down the system in case of an emergency.
  4. Battery
    The most commonly used battery in home solar systems is a lead-acid battery of the type used in motor vehicles, sized to operate for about three days. Vehicle batteries for are often used as they are relatively inexpensive and locally available. A new battery will not reach its full capacity during the first discharge cycle. As many as 10 conditioning cycles of charging and discharging may be necessary before the battery reaches full capacity. Capacity is also affected by temperature, with low temperatures slowing down the chemical reactions that take place in the battery and high temperatures accelerating the corrosion rates of the electrodes. A well-designed battery enclosure should be installed to maintain temperatures and the enhance safety.
  5. Lamps, ballasts and fixtures
    The most common reason for installing a home solar system is to provide brighter, safer, cleaner, and more convenient lighting in the home. Efficient fluorescent lights, such as compact fluorescent lights (CFL) or tube lights, are usually preferable to incandescent lights because of their higher efficiency. Low-watt (1-2 W) incandescent lights may be preferable where the requirement is for low-level area lighting, or orientation lighting.
  6. Wiring, switches and outlets
    Home solar systems should have high-quality switches and outlets. Undersized wiring is sometimes used in home solar systems, particularly when additional light fixtures are installed. This practice leads to energy losses and unacceptable voltage drops. All wiring should be standard copper wire, preferably size to keep voltage drops to less than 5 per cent between battery and load. Home solar systems should also have a distribution panel that allows users to connect additional loads simply and safely, using the circuit protection and LVD features of the battery charge regulator.

Assessing the Impact

Perceived benefits

Stand-alone home solar systems can meet the growing electricity needs of rural households. Studies of off-grid renewable energy systems in developing countries have shown that these technologies can provide reliable and comparatively low-cost electricity services to rural households and communities. The supply of electricity from such systems brings tangible social and economic benefits to rural populations in developing countries that include the ability to refrigerate food and medicine, lighting for households, power for small electric motors (such as water pumps), and provision of education and communication opportunities for isolated rural populations.

Taking into account social and technical aspects

Home solar systems are not always the most affordable option, and cost of the modules is a very important aspect. Different components have different lifetimes, ranging from 20 years for the module, to three or four years for the battery. In areas where batteries are expensive, a home solar venture may not be viable. There is also a need to improve after-sales services and feedback from consumers, an aspect that the World Bank’s Renewable Energy Development Project is attempting to improve. Home solar systems are also not always as environmentally friendly as they first appear. Batteries constitute a major concern for the large-scale implementation of home solar systems.

The principal technical aspect to take into account is that of system losses. Losses usually occur from the PV module through the following:

  • Orientation. For every location, there is an optimum direction and an optimum angle that results in the greatest amount of annual electricity generation. When the direction is within about 20 degrees of the optimum, and the tilt angle within about 10 degree of the optimum, the electricity generated is within about 5 per cent of the optimum.
  • Temperature effect. Other than orientation, this is the principal variable.  If the temperature gets too high, the output of the solar module is negatively affected.
  • Shading of the module. During part of the day the module may be shaded, and over a number of years this have a permanent effect on the module.
  • Dirt. Modules need to be as clean as possible. Dust can build up on the module, causing energy losses of about 10-15 per cent.

Maintaining quality has also been a problem in many places. The absence of a quality-control process in production and infrastructure has been a serious obstacle to widespread dissemination and use of PV.  Given the urgent need to assure quality processes in all stages of PV systems infrastructure – design, development, manufacture, testing, installation, and maintenance – the PV and financial communities have promoted initiatives to establish quality standards and procedures.

Finding the way forward

Rural electrification is now and will remain an essential element for rural development in developing countries. Renewable energy technologies like photovoltaics can provide an economical option for meeting the energy needs of remote rural households in these countries. For these technologies to compete with conventional options such as fossil fuels, effective policies are required, including:

  • The building of an institutional framework to support renewable energy development;
  • The establishment of effective financial mechanisms to provide capital for renewable energy development;
  • The adoption of incentives to spur on renewable energy development;
  • The implementation of market transformation strategies to encourage renewable energy development;
  • The creation of international standards to bring about validated and institutionalised quality programmes for the manufacture, installation, maintenance and testing of PV components and systems;
  • The enhancement of international cooperation to promote renewable energy technologies.

The Renewable Energy Development Project is advancing the implementation of these policies. The challenges to widespread installation of household renewable energy systems can be met if principles of sustainable development inform economic, energy and environmental policy, and if international support is mobilised to meet the needs of communities in developing countries. Together, developing countries and the world community can enact the innovative policies that will realise a sustainable future.

Further Information


Byrne, J., Shen, B. and Wallce, W. (1998). ‘The economics of sustainable energy for rural development: A study of renewable energy in rural China.’ Energy Policy. 26(1): 45-54.

Vervaart, M. R. and Nieuwenhout, F. D. J. (2001). Home Solar Systems:Manual for the Design and Modification of Solar Home System Components. Washington: World Bank.

Participating Organisations

Centre for Renewable Energy Development

Energy Services Delivery Project

Global Environment Facility (GEF)

World Bank: ASTAE

Donor and Supporting Organisations

Department for International Development (DFID)


World Bank


ITDG Technical Briefs

National Renewable Energy Laboratory: China

UNDP China

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