Good day, everyone. Today we shall discuss a hot topic within the energy sector: how will mechanism-based tariffs impact future investments in new energy? This policy not only alters the calculation of project returns but profoundly reshapes the competitive landscape of the new energy industry. This article will guide you through the opportunities and challenges underlying this structural transformation, examining policy shifts, investment logic, and corporate response strategies.

I. The Core Logic of Mechanism-Based Tariffs: From ‘Stable Returns’ to ‘Market Dynamics’

Historically, renewable energy projects benefited from fixed feed-in tariffs, ensuring predictable returns and manageable risks. Today, the introduction of mechanism-based tariffs—featuring market-based bidding and differential settlement mechanisms—signals the sector’s full transition to a new phase where all electricity generated enters the market.

Simply put, when market prices fall below the mechanism-based tariff, the state provides compensation; conversely, excess revenues are returned.

This seemingly balanced mechanism fundamentally transforms investment from ‘certain returns’ to ‘market competition’.

Existing projects (commissioned before June 2025) remain anchored to coal-fired power benchmark prices, ensuring relatively stable returns.

New projects (commissioned after June) determine electricity prices through provincial bidding, creating a competitive landscape where ‘the lowest bidder wins’.

II. Revenue Model Transformation: From ‘Safety Net’ to ‘Competitive Capability’

The implementation of mechanism-based pricing has significantly increased the volatility of internal rates of return (IRR) for projects. Taking Shandong’s photovoltaic bidding as an example, the clearing price was merely 0.225 yuan/kWh, representing a nearly 43% decline from the coal-fired benchmark price, with some projects now approaching the break-even point.

This implies that future investors must not only possess technical expertise but also develop capabilities in electricity price forecasting and risk management.

Hui Jue Technology’s market analysis team notes: ‘Under identical conditions, energy storage configuration, forecasting accuracy, and project siting will directly determine investment success or failure.’

III. Regional Selection Becomes Critical: Which Tariff Offers Greater Value?

Mechanism-based tariffs vary significantly across regions. For instance, Zhejiang’s ceiling stands at ¥0.35/kWh, while Xinjiang’s is merely ¥0.28/kWh.

For identical photovoltaic technology, the internal rate of return (IRR) gap across regions can reach 2–3 percentage points.

Consequently, enterprises must reassess regional deployment by integrating resource conditions, grid absorption capacity, and local incentive policies.

Highjoule(HJ Group) has deployed large-scale energy storage projects in both East China and Northwest China, delivering flexible, locally tailored solutions through mobile energy storage vehicles and containerised energy storage systems.

IV. Low-price bidding drives industry efficiency gains: Energy storage emerges as a new fulcrum

As quotation competition intensifies, project developers are compelled to reduce costs and enhance efficiency in equipment procurement, EPC management, and system integration.

Energy storage functions as a ‘profit buffer’ within this process.

Data indicates that configuring a 15% energy storage system can increase the IRR by 0.5–1 percentage points, while peak-valley arbitrage revenues (reaching up to 0.8 yuan/kWh in Jiangsu) further enhance project stability.

Highjoule(HJ Group)’s liquid-cooled energy storage systems and intelligent EMS effectively reduce energy consumption and improve energy conversion efficiency, boosting average returns by approximately 6–8% in comparable projects. This makes ‘integrated photovoltaic-storage systems’ a key weapon for developers to stand out in competitive bidding.

V. Intelligence and Diversified Returns: The Second Growth Curve for New Energy Investment

Under the mechanism-based electricity pricing model, AI output forecasting, green certificate trading, and carbon asset management have emerged as new profit centres.

AI algorithms optimise generation forecasting, reducing error rates to within 5% and minimising deviation penalty losses.

Concurrently, carbon assets (e.g., CCERs) continue to yield supplementary returns, boosting profits by 5–8% for certain wind power projects.

Highjoule(HJ Group) is advancing the implementation of ‘energy storage + AI dispatch’ systems, leveraging intelligent algorithms to enhance storage system intelligence.

VI. Strategic Recommendations: Navigating Steadily Under the New Mechanism

1. Existing Project Holders: Strengthen full-lifecycle revenue management to secure current feed-in tariff benefits;
2. New project developers: Prioritise regions with high electricity price potential while controlling initial investment costs;
3. All investors: Actively deploy energy storage, optimise power forecasting, and explore virtual power plant and direct green electricity supply models.

Highjoule(HJ Group) believes that under the new pricing framework, technological prowess and cost management will form the ‘moat’ for renewable energy enterprises. Only by integrating energy storage, intelligent solutions, and market strategies can companies stand out in intense competition.

The introduction of ‘mechanism-based pricing’ marks not an endpoint but an accelerator for new energy marketisation. For energy technology enterprises like Highjoule(HJ Group), challenges coexist with opportunities. Only through proactive positioning and technological leadership can one secure a leading position in the new wave of energy transition.