Core Viewpoint - The green certificate (绿证) system in China has rapidly developed, becoming a crucial mechanism for renewable energy identification and consumption, with significant growth in issuance and trading volumes, but still facing challenges in demand stimulation and market balance [1][2][3]. Summary by Sections Green Certificate Issuance and Trading - As of December 2024, China has issued a total of 4.955 billion green certificates, representing a year-on-year increase of 21.45 times, with 3.379 billion being tradable [2][3]. - The total trading volume of green certificates reached 553 million, marking a year-on-year increase of 4.19 times, but only about 10% of the issued certificates were traded [2][3]. Demand Stimulation and Policy Implementation - The National Energy Administration emphasizes the need to accelerate market cultivation and stimulate demand for green certificates, particularly through mandatory consumption policies in high-energy-consuming industries like steel and petrochemicals [2][3]. - The implementation of mandatory green certificate consumption will increase compliance costs for companies in the short term but is expected to drive long-term green transformation [3][4]. Long-term Implications for Industries - The policy is anticipated to push industries towards green transformation, enhancing energy efficiency through technologies like distributed solar and energy storage systems [4]. - Companies failing to meet green consumption standards may face production limitations, creating a dual constraint mechanism that promotes technological upgrades and green supply chain development [4]. Policy Coordination and Market Development - Effective policy coordination is essential for overcoming challenges in green certificate application, with a focus on establishing a comprehensive standard system and improving the management of green certificates [5][6]. - The integration of green electricity consumption information into ESG reporting for listed companies is expected to enhance transparency and align with international disclosure requirements [7][8]. International Recognition and Market Expansion - The unconditional recognition of China's green certificates by the RE100 initiative signifies a major achievement, enhancing the credibility and attractiveness of Chinese green certificates in international markets [9][10]. - This recognition is likely to increase the willingness of both domestic and foreign companies to purchase Chinese green certificates, thereby boosting demand and enhancing the green competitiveness of Chinese exports [10][11].

Investment Rating - The report maintains a positive investment outlook for the renewable energy sector, particularly in solar and wind energy, highlighting strong demand and growth potential in both domestic and international markets [4][9][39]. Core Insights - The domestic solar installation in January-February 2025 reached 39.5GW, with an expected annual increase of 28% in total installations for 2024 [4][5][9]. - Global solar installation is projected to reach between 531GW and 583GW in 2025, with optimistic growth estimates of over 10% [28][39]. - The supply chain is showing signs of recovery, with prices stabilizing and a slight rebound in production across various segments, including polysilicon and solar modules [41][49]. Summary by Sections Domestic Market - In the first two months of 2025, China added 39.5GW of solar capacity, maintaining stable growth, with a total expected installation of 215-255GW for the year [4][6][9]. - The National Development and Reform Commission and the National Energy Administration have initiated reforms to enhance market-driven pricing for renewable energy [10][15]. International Market - The global demand for solar energy is steadily increasing, with significant installation plans emerging in regions like Latin America and the Middle East [18][28]. - In January 2025, India reported a substantial increase in solar installations, with a total capacity exceeding 100GW [31][34]. Supply Chain Dynamics - The polysilicon production in February 2025 was approximately 9.23 million tons, showing a slight decrease but expected to recover in March [49]. - Solar module prices have seen a minor increase due to rising demand from distributed energy projects, with significant players adjusting their production strategies accordingly [43][44]. Investment Recommendations - The report suggests focusing on high-growth areas such as inverter and racking systems, as well as leading solar manufacturers with cost advantages and strong distribution channels [4][39]. - Key companies to watch include LONGi Green Energy, Trina Solar, and various emerging technology leaders in the solar sector [4][39].