Energy Governance Case Study #06

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penalised companies at the production-line and retail stages for non-compliance with system performance requirements. These efforts strengthened the quality of SHS at multiple ends of the supply chain. This start to finish aspect is a key contribution of REDP, without which SHS sales may have accelerated anyway (since a growing market already existed and numerous other rural electrification projects were ramping up operations in neighboring areas), but might have stagnated in later years without lasting product quality improvements. It is also likely that participating companies would not have as quickly entered export markets had the quality standards not been imposed, especially those markets where IEC compliance is a threshold requirement.

The Renewable Energy Development Project exceeded its targets of installed PV capacity and contributed to renewable energy suppliers manufacturing products in compliance with international standards, enabling them to enter export markets. While some of its two million SHS beneficiaries would have ultimately received SHS units from other programmes, or gained grid connections, the project expedited the process in areas where energy poverty had become chronic and widespread. The relative contribution of REDP to China’s evolving RE policy landscape is difficult to measure, but likely played a significant role in highlighting RE’s merits in combating air pollution, offering energy amenities to households reliant on less modern energy carriers, and supporting the development of the country’s growing RE industries. At the same time, the SHS experience of beneficiaries is far from convergent, with some end users very satisfied with their systems and others holding onto damaged units with no expectation of undertaking repairs. As with other SHS deployment programmes, the aftersales service component of the REDP was one of the more neglected aspects of project execution, most likely because profit margins on servicing are low and project designers were preoccupied with the marketing and delivery aspects of the project, dedicating less attention to what follows after the SHS units have been installed. Though the evidence we gathered in Qinghai Province is anecdotal, it seems unlikely that the challenges of equipment maintenance and repair access there are unique. Towards that end, SHS users would benefit from greater information about system care and

maintenance to reduce the incidence rates of damaged systems. As some herders have relied on solar energy for more than a decade, retailers may falsely assume that all customers have familiarity with the technology (or at least have neighbors who do), and therefore consider such information irrelevant. Still, interviewed end users demonstrated imperfect knowledge about how the system functions as well as how they can derive the greatest benefit from an SHS, hence we believe providing this information in the local language would not be superfluous. We also see scope for expanding the number of local outlets or mobile service workers who possess the necessary skills and access to spare parts to fix damaged SHS units. Further research is merited to investigate the barriers preventing this from naturally occurring and exploring interventions that might improve the affordability of procuring spare parts and training such individuals. Given that REDP surpassed its PV targets, exhausted its TI and MDSF funding, and contributed to China’s evolving RE policy environment, the weak after-sales support component seems anomalous. REDP was highly successful in demonstrating the value of SHS ownership and strengthening the fledgling PV market to improve their business operations and technical capacity through product development, testing, and certification. As evidenced by our interviews with PV companies, they are becoming internationally competitive with exports comprising a growing share of their revenue, made possible by the introduction of quality standards and adherence to international certification criteria. Companies benefited from knock-on effects, not only by transferring technology advancements from the TI component to nonSHS product lines and improving their competitiveness, but also leveraging these gains to win SHS contracts both inside and outside of China. Though an un-testable hypothesis, the words of one interviewee are likely to hold true; the synergy of simultaneously focusing on industry strengthening, tightening quality standards, incentivising sales into remote areas through PV sub-grants, and showcasing the value of SHS through roadshows and videos was responsible for REDP’s success. As such, a key takeaway for PV deployment design consists of identifying each stage of the project life-cycle, from product design to after-sales care, and devising components that target the stakeholder’s immediate needs without fostering long-term dependence.


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