Core Viewpoint - The era of distributed photovoltaic (PV) systems facing market challenges has arrived, marked by extremely low electricity prices, such as 0.01 yuan per kilowatt-hour in regions like Shandong and Jiangsu [5][6][10]. Policy Background - The introduction of the "full market settlement for distributed renewable energy" policy on January 1, 2026, signifies a shift from guaranteed pricing to market-driven pricing for distributed PV systems, exposing them to price fluctuations [10][11]. - This policy change reflects the increasing scale of renewable energy installations, which reached 1.84 billion kilowatts by the end of 2025, necessitating a move away from guaranteed purchase models [11][12]. Market Impact - The low electricity price of 0.01 yuan per kilowatt-hour is not constant but occurs mainly during peak solar output and low system demand periods, significantly lowering overall electricity prices [12]. - For example, a distributed PV project in Jiangsu generated 11,946 kilowatt-hours in January, resulting in a market price of 0.259 yuan per kilowatt-hour, a drastic drop from the previous guaranteed price of 0.39 yuan per kilowatt-hour [12]. Competitive Landscape - Different types of renewable energy sources exhibit varying market competitiveness, with wind power and larger-scale PV systems outperforming smaller distributed PV systems [14]. - The disparity in competitiveness is influenced by the capacity of local power grids to absorb renewable energy, with regions like Shandong experiencing overcapacity issues [14][15]. Challenges for Distributed PV - The high proportion of distributed PV installations in regions like Shandong (over 60 million kilowatts) raises concerns about their ability to cope with market volatility and pricing challenges [15][16]. - Smaller distributed PV systems, particularly household installations, lack the capacity to participate actively in the market, making them vulnerable to price fluctuations [16]. Strategic Recommendations - The emergence of extremely low electricity prices serves as a warning for the distributed PV sector, indicating the need for more strategic project planning that considers demand, infrastructure, and grid capacity [16].

Industry Overview - The Zhejiang Provincial Development and Reform Commission has released a notice seeking public opinions on the "Implementation Plan for Market-oriented Reform of New Energy Grid Connection Prices in Zhejiang Province" [1] - The draft proposal states that all new energy projects (wind and solar power) will enter the electricity market, with the mechanism price for existing projects set at 0.4153 yuan per kilowatt-hour [1] - The proposal also clarifies the bidding principles for the mechanism price of incremental new energy projects [1] Company Insights - Guoneng Rixin focuses on providing new energy information products and related services to electricity market participants, with a core product centered on new energy generation power forecasting [1] - Longxin Group operates an energy internet platform that connects a vast number of electricity load users and supply assets, offering efficient, economical, and green energy asset operation and electricity trading services [1] Market Dynamics - According to Xinda Securities, the key to participating in electricity market trading operations lies in the ability to predict (including short-term weather changes, electricity supply and demand, and line congestion) and optimize (including optimizing bids and output, as well as various long-term contracts and spot electricity positions) [1] - Achieving high-precision predictions regarding weather, prices, load, and market demand will provide market participants with a competitive advantage in trading and commercial operations [1]