SHANGHAI: China‘s northern Hebei province will phase out subsidies paid to some newly-built solar power plants from January next year, an official from the local pricing bureau told Reuters on Thursday, part of a state moves to cut government support for the industry.
China is in the process of reducing direct subsidy support to the solar sector, which has already slashed construction and production costs by an average of 90 percent between 2007 and 2017, according to government figures.
The new policy in Hebei will initially apply to solar power plants built as part of a national scheme to create earning opportunities for poverty-stricken regions
Hebei will continue to pay an additional 0.2 yuan ($0.03) per kilowatt hour (kWh) to qualified solar power facilities that are connected to the grid before the end of this year, with the subsidy set to last three years. New plants that come into operation after Jan. 1, 2019 will not be subsidised, it said.
China’s total solar power capacity reached 130 gigawatts by the end of last year, up 68 percent from 2016 and accounted for 32.4 percent of the global total. A rapid capacity surge in recent years has put the government under financial pressure and caused a long backlog in subsidy payments.
Though subsidies are being phased out, the Chinese government has promised to “ease the burden” on renewable energy producers by strengthening guaranteed purchasing agreements with local grids and reducing land costs. ($1 = 6.3669 Chinese yuan)