China will increase deployment of solar power schemes inland over the coming decade as it looks to phase out subsidies from the energy sector by 2021.
Gansu and Xinjiang provinces will see the highest concentration of solar projects in the future as the government looks to redirect efforts, earlier focused on coastal areas, to its interior.
"The steady reduction in renewables generation curtailment between 2016 and 2018, and anticipated continued progress in integrating inland renewables supplies to the grid over the coming five years, lead us to expect inland regions to again become the key solar capacity growth drivers in China over the coming decade," Fitch Solutions said in a research note on Wednesday.
The inland provinces have natural conditions favourable for solar power generation, land availability, and are also cost-competitive.
China, the world's biggest oil importer aims to change its power generation mix by adding more renewables in a bid to reduce pollution levels that have clogged up some of its biggest cities. At the end of 2018, China had a total renewables power generation capacity of 728 gigawatts, with the sector outpacing capacity build-up from fossil and nuclear-based sources. In June, the country's renewables capacity increased by 9.5 per cent to 750GW, as China adopts a more sustainable approach to powering its economic growth.
The country, which is looking to cut back on its oil imports, focusing on cleaner gas as a transitional fuel, is also pumping significant investments into clean energy. China accounted for 45 per cent of all investments in renewables globally, driving $126.6 billion (Dh464.93bn) in the sector in 2017.
Inland provinces in China such as Xinjiang, Gansu, Qinghai and Inner Mongolia are expected to see higher capacity build-up over the next decade, thanks to their stronger solar irradiation levels.
China's solar momentum, which began with a focus on its interior, before moving to coastal lands is expected to go back to its heartland.
Despite having 56 per cent of total installed capacity inland by the end of 2014, growth slowed due to increasing grid bottlenecks.
"Rapid build-out of renewables capacity inland was not accompanied by sufficient investment into grid infrastructure, in turn leading to substantial renewables generation curtailment inland," said Fitch.
However, these curtailment rates are expected to steadily fall, with Gansu province alone managing to lower its rate to 19 per cent last year, from 43 per cent in 2016.
"As these figures improve further, we expect solar development to be revived in future bidding rounds as developers capitalise on the favourable natural conditions for solar power in the two regions [Gansu and Xinjiang].