China will allow distributed photovoltaic solar power producers to be connected to the nationalgrid free of charge in a bid to support the renewable-energy industry.

State Grid Corp, China's largest State-owned power utility company, announced on Friday thatstarting Nov 1, it will provide a free connection service for distributed PV solar electricityproducers that are close to customers. State Grid will be responsible for the cost of theconnection design and the national grid's modifications.

The cost for one network access point of the connection is 420,000 yuan ($67,100), and 10points will be needed for a PV solar project of 1 mW, according to Wang Sicheng, a researcherat the Energy Research Institute under the National Development and Reform Commission.

Chinese PV solar panel producers have been suffering because of anti-dumping investigationsby the United States and the European Commission since October 2011.

The US announced punitive tariffs earlier this month, and many small and medium-sized solarcell manufacturers went bankrupt as a result of declining orders from the shrinking foreignmarket.

Since then, several government departments have been working together on measures andpolicies to help the industry. A key solution is to expand domestic demand, reducingdependency on overseas markets.

The two major obstacles to China's PV solar power development are high building costs andpower transmission management, said Shi Lishan, deputy director of the National EnergyAdministration's new energy and renewable energy department.

"The government provides favorable policies such as subsidies to PV solar power producers.Otherwise, the high costs need many years to get a return," he said. "Meanwhile, we also lackrelated regulations and laws on a distributed solar power transmission network.

He said the ultimate goal of China's power transmission is to provide an electricity sales servicefor users that will be as simple as buying an electric appliance in a store.

State Grid's move will help improve the scale of solar power generation in China, said MartinDaniel, senior Asia power analyst at Platts, a global energy information provider. He saiddistributed PV solar power is a good way to solve the problem of long distances between majorpower plants and electricity consumers in rural areas.

During the first nine months, 2.71 million kW of PV solar power projects were integrated into thenational grid within the State Grid's business areas, 4.2 times more than last year, according toShu Yinbiao, executive vice-president of the company.

Those solar projects have generated a total of 2.52 billion kilowatt-hours during the first ninemonths, a 540 percent year-on-year increase.

At present, PV solar projects with a total generation capacity of 1.26 million kW that have beenapproved for connection are under construction nationwide, Shu said.

Ding Jie, senior engineer at the China Electricity Power Research Institute, said the technologyof distributed solar power generation has developed well in China. However, due to the newenergy source's instability, it will affect the national grid. "It will take a very long time before thetechnology is totally mature," he said.