1. Regulated Electricity Price (Feed-in Tariff / Benchmark Price)

The Regulated Electricity Price is a government-set benchmark price for renewable energy projects.

When the market trading price falls below this benchmark, the government provides a subsidy to cover the difference.

When the market price exceeds the benchmark, the project must return the excess revenue.

This mechanism stabilizes revenue expectations for renewable projects and reduces risks from market volatility.

Provinces/municipalities set their own prices based on local renewable energy targets.

Currently, this price typically applies only to electricity traded in the spot market.

2. Mechanism Electricity Volume

Mechanism Electricity Volume refers to the amount of electricity generation settled under the sustainable pricing mechanism (eligible for the regulated price).

This volume benefits from the "bidirectional adjustment" policy of the regulated price (subsidies below benchmark, clawbacks above).

However, this volume cannot also generate revenue from Green Certificates (double-counting is prohibited).

Therefore, power generators must choose between receiving the regulated price subsidy or selling Green Certificates for this electricity.

3. Regulated Price Lifespan

The lifespan of the regulated price guarantee is typically around 12 years (approximately 14 years for offshore wind projects), covering the primary operational period.

Projects receive the revenue stability of the regulated price during this period.

The calculation rules for this price are based on the average construction cost of renewable energy plants within the province.

Projects achieving payback in just 6-7 years are now rare, except for some commercial & industrial (C&I) projects.

4. Market-Based Trading

Market-Based Trading refers to renewable energy projects participating in electricity markets where prices are determined by supply and demand.

5. Medium-to-Long Term (MLT) Trading / Contracts

Medium-to-Long Term Trading involves power purchase agreements (PPAs) signed between generators and electricity consumers or retail companies, typically for durations of 1 year or longer.

These contracts help lock in electricity prices, reducing risk from market price fluctuations.

6. Spot Market Trading

Spot Market Trading involves short-term transactions conducted in the day-ahead or real-time markets based on actual electricity supply and demand.

Spot market prices exhibit higher volatility but more accurately reflect real-time market conditions.

7. Ancillary Services Market (Key Revenue Source for Energy Storage)

A crucial revenue stream for energy storage projects.

Participating in peak shaving and frequency regulation can yield compensation of 0.1 - 0.3 RMB/kWh.

It's recommended that C&I PV projects include 15%-20% energy storage capacity to enhance overall project revenue.

8. Green Certificate (Renewable Energy Certificate - REC)

A Green Certificate is a government certification representing the environmental attributes of renewable electricity generation. Each certificate typically represents 1 MWh (1000 kWh) of green power.

Green Certificates can be traded on the market, providing generators with an additional revenue stream.

9. Green Certificate Trading

Green Certificate Trading involves renewable generators selling their Green Certificates to companies or individuals needing to fulfill Renewable Portfolio Standards (RPS) obligations or voluntary sustainability goals.

10. Carbon Emissions & Carbon Footprint

Carbon Emissions: Refer to greenhouse gases (like CO2) released by companies during their production processes.

Carbon Footprint: Measures the total greenhouse gas emissions caused directly and indirectly by a product, service, or organization throughout its entire lifecycle.