In his apartment in Songjiang district, Dang Jihu received his first paycheck from the Songjiang branch of the Shanghai Municipal Electric Power Company earlier this month. The 93.5 yuan ($15.05) check was not for work, but for the 2,500-watt rooftop solar power generator he installed two months ago. The set of 10 solar panels is now providing for free about half the electricity Dang needs for his home.

Dang is the first of six people in Shanghai who have successfully "plugged" their household solar energy systems into the national electricity grid and are now selling surplus power to it. Late last year the State Grid Corporation of China announced it would allow domestic solar power producers to connect to the national grid for free. Before that solar panel owners in China could only store their surplus electricity in expensive storage batteries that had a short lifespan, normally between three and five years.

Clean and green

Dang is a senior manager at a solar panel company and a staunch supporter of clean, green energy. He applied to the district electric power company soon after it announced the new solar panel policy. He applied in December last year and his rooftop solar power officially started working in January.

"The Songjiang power company received the information on the new policy at almost the same time I did and had little preparation for it. Luckily they were quite efficient in sorting out the details and completing the procedures," Dang said.

"Now during the day we mostly use our own green energy although at night we still have to use power from the grid."

A Wi-Fi monitoring system sends real-time power generation figures to the Internet, which allows Dang to check his solar power supply with his computer or smartphone.

It was a rainy afternoon when he was talking to the Global Times, at the same time checking his readings on a computer screen that showed a steadily rising curve from January to March. "The weather is bad today so my system has only generated only four kilowatt hours of power so far. On sunny days it can generate 14 kilowatt hours a day," Dang said.

"As the temperatures get higher and there is more sunshine, the system will certainly generate more power."

Since its installation, the system has generated 449.35 kilowatt hours of power, which is the equivalent of saving 330 kilograms of carbon dioxide emissions or 37 gallons of oil. He has sold 196 kilowatt hours to the grid and his home has used 253 kilowatt hours over two months, about half the average usage before the system was installed.

Probable disappointment

While the idea of a home-based power plant sounds tempting, those who expect to turn a profit from it will probably be disappointed.

Sun Yaojie is a deputy professor at Fudan University's Department of Illuminating Engineering and Light Sources and a researcher in photovoltaic energy. He said that the average cost of installing a 1,000-watt solar panel was about 10,000 yuan. Dang paid 26,200 yuan for his 2,500-watt set.

"With the current subsidies (the money that the State Grid pays to homes for their domestically-generated solar power), it's hard to achieve a return on the investment in the hardware and installation. To promote domestic solar panel usage, the government will have to ensure that people can actually benefit," Sun said.

At present, the State Grid pays only 0.4773 yuan for each kilowatt-hour (kwh) received from the domestically-generated solar power sets, the same price it pays for power generated by desulphurized coal. This is even less than the 0.617 yuan per kwh rate the power company charges Shanghai homes for daytime electricity.

But on Tuesday Dang received another check for 102.5 yuan from the district electric power company. "They've increased the payment to 1 yuan for each kwh of domestically-generated solar power. This is really positive," Dang told the Global Times.

Draft regulations from the National Development and Reform Commission on the pricing of domestically-generated solar power sold to the State Grid that the price paid for solar power in Shanghai will be 1 yuan per kwh. And for each kwh of solar power consumed, users will enjoy an additional 0.355 yuan per kwh subsidy when they use distributed energy.

A long wait

Even so, it will take at least 10 years for Dang to show a profit from his home power plant. The lifespan of a solar panel is usually about 25 years.

As well as the economics, domestic solar panels face other obstacles. Users need the consent of neighbors living in the same building or condominium or neighborhood committees before they can install the rooftop panels.

Before Dang filed his application, the neighborhood committee told him that he needed the consent of at least two thirds of his neighbors. "I had to ask for the signatures from nine neighbors. Luckily all of them were supportive and signed." The six-story building where Dang lives houses 12 families and Dang lives on the first floor.

The size of the panels is another obstacle for would-be home solar power enthusiasts. Dang's 10 solar panels measure 1.7 square meters each, and the 10 panels take up most of the roof area.

"If someone else wants to install a similar system in my building, there won't be enough room," Dang said.

There are also difficulties for individuals purchasing solar panels. Dang works in the industry but explained: "Currently most solar panel companies don't sell to individual customers. They only look for big contracts and don't bother about installing just a few panels. If someone not in the solar panel industry wants to install panels, they might have to search online for secondhand equipment."

After the solar panel regulations were introduced last November, the Shanghai Municipal Electric Power Company reported receiving 20 applications to install panels - six from individuals and 14 from businesses. A spokesperson said that most of the individuals were working in the solar panel industry, and most of the businesses were solar panel companies.

Rescuing the industry

Tapping the domestic market and subsidizing distributed solar energy generation were some of the measures the State Council introduced last December to rescue the beleaguered solar panel industry.

China is the largest solar panel manufacturer in the world, but the future of the sector is in question, as the main subsidiary of the Suntech Power Holdings, once the largest solar panel maker in China, faced bankruptcy last week.

An uncontrolled solar boom in the past decade has led to overproduction. Production soared tenfold from 2008 to 2012 and this caused prices to plummet dramatically.

With more than 95 percent of the Chinese-produced panels being exported, the industry relies heavily on foreign demand. It suffered a severe blow recently when the US and the European Union both imposed steep anti-dumping tariffs on solar panels imported from China.

Analysts say in the short term, it is unlikely that allowing individuals to sell power to the State Grid will boost the industry.

Xiao Han, a researcher with the Shenzhen-based industry research institute CIConsulting, said: "The idea that people manufacture their own electricity is tempting. However, while it's ecologically meaningful, the high installation cost, low returns and long investment cycle make it difficult for this to become widely accepted. The average income in China is still quite low. So for quite a long time, this will just be an idea with the possibility of widespread adoption almost nonexistent.

"It's easier to develop solar energy in the West, where there are ample solar energy resources. Distributed solar energy can only work as a supplement and be promoted in economically-developed areas. It's pointless to expect that this will help save the entire ailing solar panel industry," the researcher told the Global Times.

Sun, the professor, said widespread adoption was possible, but would rely on government intervention. "Technically speaking, solar panel and interconnecting technologies are ripe now. The key lies with the government, which should ensure that people feel that their investment is worthwhile."

Do it yourself electricity connections

If you want to set up your own domestic power plant, here are the steps to follow. It takes up to 45 working days to complete the application and installation process. Remember that this is just for interconnection - you should have already bought the solar panels.

1. The applicant fills out an application form for interconnection. This is available at local electricity company outlets.

2. The applicant must have approval from local authorities before starting the installation itself.

3. The applicant has to provide proof that neighbors or the condominium or neighborhood committees have no objections to the project.

4. The power company will visit the applicant's home and make its plans for the interconnection.

5. The power company will install its meters and sign the contract.