China's Gigawatt-Sized Offshore PV Dream Faces Headwinds

China is positioning itself as a global leader in the field of offshore photovoltaics. Bloomberg New Energy Finance predicts that by the end of 2025, China will become the world's first country to achieve a gigawatt level installed capacity of offshore photovoltaics. This emerging technology involves installing photovoltaic panels on pile supported fixed or floating platforms at sea. However, to scale up, the industry must address long-standing challenges such as high costs, low returns, technical issues, and a lack of construction infrastructure.

Source: News media

High costs may hinder market growth. The total capital expenditure of offshore wind power projects using pile foundation fixed systems is twice that of onshore wind power projects, and the internal rate of return for a project is only 1.3% -3.9%, which is less than half of the return rate of ordinary onshore wind power projects. In addition, due to technical barriers related to wave resistance, floating photovoltaic systems can only reach kilowatt level during the pilot phase, and the lack of offshore engineering infrastructure also limits the construction speed.

The world's largest offshore photovoltaic grid connected project in Shandong of China

According to Bloomberg New Energy Finance, as of December 2024, China's offshore photovoltaic installed capacity is 703MW, with only one offshore photovoltaic project in Shandong Province having an internal rate of return of 3.9%. It is expected that by the end of 2025, China's offshore photovoltaic installed capacity will exceed 1GW.

Bloomberg Statistical Data - China's Domestic Offshore Photovoltaic Installed Capacity in 2024