『Abstract
　China has recently become a dominant player in the solar photovoltaic (PV) industry, producing more than one-third of the global supply of solar cells in 2008. However, as of 2008, less than 1％ of global installations were based in China. recently, the government has stated its grand ambitious of expanding the share of electricity derived from solar power. As part of this initiative, policy makers are currently in the process of drafting a feed-in tariff policy to support the development of the solar energy market. In this paper, we aim to calculate what the level of such a tariff should be. We develop a closed form equation for the cost of PV, and use forecasts on prices of solar systems to derive an optimal feed-in tariff, including a digression rate. The focus is on the potential of residential and small scale commercial solar PV installations. We show that the cost of small scale PV in China has decreased rapidly during the period 2005-2009. Our analysis also shows that optimal feed-in tariffs vary widely between regions within China, and that grid parity could be reached in large parts of the country depending on the expected escalation in electricity prices.

Keywords: Cost of solar photovoltaics; Feed-in tariff; China』

1. Introduction
2. Energy in China: the role of solar PV
3. Economics of solar PV
　3.1. Cost analyses of solar PV
　3.2. Demand side solar PV policies: the feed-in tariff
4. Method
　4.1. Closed form equation for the cost of PV
　4.2. Optimal FIT
5. Data and assumptions for China
6. Results
　6.1. Cost of small scale PV in China
　6.2. Optimal feed-in tariff for China
7. Conclusion
References