**Abstract** At the beginning of the year, during the National Energy Work Conference, the National Energy Administration set a target of 14 gigawatts for new photovoltaic (PV) installations in 2014. Experts estimate that achieving this goal would require approximately 140 billion yuan in investment. However, financing remains one of the biggest challenges in the development of the PV industry. Downstream projects, such as power plants, face long payback periods and high risks, which make them less attractive to banks. Industry insiders note that the interest rates offered by banks for PV power plant loans are generally higher than those for other types of projects. While many banks are open to new energy initiatives due to government policies, PV projects are often excluded from such favorable treatment. As a result, when it comes to financing PV power plants, banks tend to delay or avoid the process, saying “we need to study it again.” Experts point out that while the investment potential of PV power stations is promising, the lack of collateral makes it difficult to secure bank loans. Some suggest exploring alternative financing channels, such as securities, foreign investments, or even private equity. However, others argue that China is not lacking capital for PV development. Instead, the main issue lies in the unclear profitability model of PV power plants. With return periods stretching up to 25 years—far longer than most financial products—investors remain hesitant. According to Meng Xianyu, vice chairman of the China Renewable Energy Society, the key to solving the financing problem lies in how benefits are distributed and managed. He advocates for diversified financing strategies, including existing bank systems, bond markets, and even foreign investment. "Foreign capital has been widely used in other industries," he said. "If the policy continues to open up, it's possible that foreign investment could also enter the PV sector, but this must be done within the national legal framework." However, Meng also noted that foreign investment in PV power plants can be complex. "Especially with distributed PV projects, there are too many issues related to interest distribution and business models," he explained. "China is unique in that there is no private ownership of residential properties, which creates uncertainty regarding benefit allocation." Wang Runchuan, manager at JA Solar, added that while there are no official restrictions on foreign banks entering China’s PV market, they are still hesitant. "Even the Bank of China isn’t willing to invest in PV projects, let alone foreign banks," he said. "Foreign banks tend to take more risks than what the domestic PV industry considers acceptable." From an industry perspective, China is not short of money, but investors are reluctant to pour funds into PV power plants. Wang believes the core issue lies in the operational model of these projects. "PV itself isn’t short of capital, and we haven’t reached a point where we need to bring in foreign investment," he said. "The real problem is the instability of returns and the uncontrollable risk, making the ROI unpredictable." Meng Xianyu suggested that, from a bond issuance perspective, the yield of distributed PV projects should exceed bank deposit and bond rates. "Issuing 25-year bonds could provide long-term returns," he said. "In the early years, the yield might be lower, so the price would be lower, but as income increases, the price would rise accordingly, depending on investor demand." He also emphasized the importance of stable policies to build investor confidence. "Although there are many investment proposals involving bonds and foreign capital, their practicality is limited," he said. "What we really need is better policies that can encourage investors to put their money in." Hung Hom, chief researcher at the China Energy Economic Research Institute, stressed the need for financial innovation in PV financing. "It shouldn't rely solely on traditional bank loans or bond financing," he said. "Innovative financial products are essential." He proposed using large-scale industrial investment funds as start-up capital or leveraging asset securitization. "By transforming power station projects into financial products, companies can generate sustainable and diversified funding each year," he added. Many private PV companies have sold their power stations, but the funds have yet to be fully recovered. This approach could help convert power plant assets into tradable financial instruments.

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