From pilot to reform: Institutional change through distributed solar experimentation in China

Policy experimentation has become a crucial tool for advancing energy transitions, particularly within complex and uncertain governance contexts. While prior research has examined how experiments support innovation and change, the institutional dynamics underpinning experimental processes remain underexplored. This study addresses this gap by investigating the county-wide distributed solar photovoltaic (PV) pilot programme in Henan Province, China. Using document analysis and interviews with 36 stakeholders conducted across multiple rounds over a three-year period (2021–2024). We integrate experimental governance with Williamson's four-level institutional hierarchy and derive a four-stage pathway, including institutional tension, actor reconfiguration, institutional embedding, horizontal diffusion. In Henan, initial alignment on decarbonisation enabled rapid rollout, but A1–A2/L1–L2 norms and rules misaligned with L3 governance and L4 transactions, generating frictions around grid access, tariffs and coordination. Pilot bargaining (B → B2) and operational bottlenecks (B1 → B2) precipitated provincial reforms to time-of-use pricing, over-the-fence trading, and ancillary-service obligations. Subsequent embedding (B2 → D) consolidated a grid–government alliance (D → B) and reordered market roles (weakened local SOEs; selective re-entry of private firms). Diffusion remained largely horizontal at L3/L4, with limited L2 harmonisation. The paper contributes a contextual analytical framework that interprets experimentation as an embedded mechanism of gradual institutional change in hybrid governance systems, while acknowledging distributional trade-offs and boundary conditions for generalisation.