Three-Zone Classification: Nationwide Unified Rules

The new policy introduces a green-yellow-red three-zone management system across the country:

• Green Zone: Sufficient power grid bearing capacity. PV projects can be connected to the grid immediately upon application with unconditional filing; energy storage is optional.
• Yellow Zone: Moderate power grid bearing capacity. Grid connection is prioritized for projects equipped with energy storage.
• Red Zone: Insufficient power grid bearing capacity. Grid renovation must be completed first, and energy storage is a mandatory requirement for access approval.

The 2019 version of the Guidelines for Bearing Capacity Evaluation of Distributed Power Connected to Power Systems stipulated that no new distributed PV systems would be allowed for connection once the reverse load rate of distribution transformers reached 80%. Though this one-size-fits-all threshold served a purpose in the early stage of PV development, its drawbacks have become increasingly prominent alongside the rapid expansion of installed capacity.

Meanwhile, potential risks remain to be noted. Grid renovation in Red Zones takes time, so restrictions on new grid connections will persist in the short term. The deployment of energy storage increases upfront investment and lowers the internal rate of return (IRR). In addition, local authorities are issuing implementation rules at varying paces. Combined with the cancellation of export tax rebates for PV modules and rising international carbon trade barriers, export-oriented enterprises are facing mounting operational pressures.