Subsidies offer hope to China’s solar industry

November 16, 2012 by  
Filed under Green Energy News

By Pu Jun

Caixin Online

) — China’s struggling solar energy equipment makers may see light at the end of the tunnel now that the government has agreed to subsidize small solar power stations and a major power distributor is offering access to the grid.

Moreover, several sources told Caixin, the government led by the National Energy Administration (NEA), an arm of the powerful National Development and Reform Commission (NDRC), plans to roll out additional solar industry stimulus policies at an accelerated rate.

The program’s ultimate goal, sources say, is to raise domestic demand for solar panels and help manufacturers that have found it increasingly difficult to sell products abroad. About 90% of China’s solar manufacturing output is exported.


Solar power subsidy cuts in Europe, the weak global economy and U.S. trade barriers for Chinese-made solar goods are among the factors pressuring domestic manufacturers.

NEA announced Sept. 14 the plan to offer subsidies to encourage solar power station installations nationwide. Altogether, the agency said, the government would support up to 15 million kilowatts of installed capacity, or more than 70 billion yuan ($11.2 billion) worth of standard solar panels.

The commission did not give a total monetary figure for the nationwide subsidy program, nor say how much money would be offered to individual power station builders. But the program would favor small power producers: NEA said it would offer subsidies only to stations outfitted with 500 megawatts or less of installed capacity.

Solar power station operators could include companies that install panels on the roofs of apartment buildings, urban commercial facilities and factories.

Station operators in northern China may be able to sell or at least transmit the electricity they make through the state-owned, regional power distributor State Grid Corp., which has apparently agreed to support the NEA initiative.

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In an Oct. 26 proposal, State Grid said it would allow small solar power stations to connect to its transmission grid and offer electricity to users within a limited range. The utility said it would provide free support services, and that a hook-up could be completed in 45 days.

China Southern Power Grid, the state-run transmission utility for much of southern China, has not responded to the NEA subsidy plan.

State Grid earlier balked at the idea of opening the grid to solar power stations. Its executives argued that solar energy is an unstable source of electricity, and that competition from station operators would reduce its own revenues.

Unfinished business

State Grid’s apparent change of heart is a step in the right direction, said Su Weili, chairman of Shanghai-based Sky Solar Holdings Co. Ltd., which builds and runs solar stations.

Power station operators, Su said, will get to choose whether to sell all or only some of the electricity generated. They may also decide how much power to produce for their own needs, and how much if any that want to buy through State Grid. Most are expected to continue buying power through the grid and thus avoid running dry on cloudy days.

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