China's booming distributed power generation industry is expected to achieve a direct market value of 10 trillion yuan ($1.6 trillion) and bring indirect business opportunities worth about 30 trillion yuan, in the coming years under the government's encouraging policies, said a member of the National Committee of the 12th Chinese People's Political Consultative Conference.

Additionally, the industry will contribute to the improvement of the country's energy consumption patterns and will allow China to meet carbon emissions reduction targets, said Li Hejun, a CPPCC member and also the chairman of the China New Energy Chamber of Commerce.

"I suggested that the country should encourage distributed solar power generation projects during last year's conferences," Li told China Daily. "The government launched policies to make my suggestions come true in December and I felt really glad."

On Dec 19, the State Council, China's cabinet, said the government would encourage distributed power generation projects of solar power and other small-energy sources such as wind, natural gas and bio-energy.

The government also urged companies and communities to install photovoltaic solar power units to ease severe overcapacity problems in the domestic PV solar panel manufacturing industry.

At the Dec 19 meeting, officials said China's PV solar panel industry is too dependent on overseas markets such as the United States and Europe.

Up to 70 percent of China's PV solar modules are exported to Europe and about 10 percent to the US. The industry was seriously affected by the high punitive tariffs stemming from the anti-dumping and anti-subsidy probes launched by US and EU.

Experts said that boosting domestic consumption is key to reducing the country's dependency on foreign markets.

"Expanding the domestic market and solving grid-connection problems will support the development of distributed solar power generation projects," said Meng Xian'gan, deputy director of the China Renewable Energy Society.

In accordance with the government's policy, State Grid Corp - China's largest State-owned power utility - began offering a service in November that allows distributed PV solar power producers to connect to the national grid for free.

In early March, the company allowed more types of power, including natural gas, biomass, wind and ocean energy, to be connected to the grid for free.

The first distributed solar power project in Beijing owned by an individual has already been connected to the grid. Ren Kai said that in addition to the savings on his home's daily power consumption, he can sell the extra electricity to State Grid for 1 yuan per kilowatt-hour.

Industry insiders said there will be many more similar projects, especially for commercial use.

Li, who is also chairman of Hanergy Holding Group - a company focusing on thin-film solar technology - said his company is working on a distributed thin-film solar power generation project at its Beijing headquarters.

"The project will have an installed generation capacity of 2 to 3 megawatts," he said. "The electricity produced will be able to meet the needs of up to 1,000 employees in the building after it is completed in June or July."

He said the project is expected to help the company save up to half of its electricity bill. He added that the company is in talks with the Beijing municipal government to develop distributed power generation projects in the city, but declined to provide details.

Hanergy is also talking to Suning Appliance Co Ltd, China's largest electric appliance retailer by sales, and Ikea (China) Investment Co, to set up distributed solar generation projects on the roofs of their stores.

dujuan@chinadaily.com.cn