China's Finance Ministry Unveils US $2.93 Solar PV Incentive

March 26, 2009 | 4 Comments

Bejing, China [RenewableEnergyWorld.com] The Chinese government said this week that it would provide new incentives for solar photovoltaic (PV) projects, further opening up this rapidly-growing energy market to the solar industry.

The Chinese Finance Ministry will provide US $2.93 per watt for projects of 50-kilowatts and above.

The Chinese Finance Ministry will provide ¥20 [US $2.93] per watt for projects of 50-kilowatts and above. The move could potentially kick-start the PV industry in China, which up until this point has been almost non-existent. While many solar manufacturers are based in the country, there has been little domestic demand for their products.

Solar stocks rallied on Wall Street today because of the announcement. Suntech Power saw its stock climb 49 percent, while Yingli Green Energy was up 47 percent and JA Solar got a boost of 34 percent.

The solar hot water and wind industries are booming in China. Many analysts believe it is only a matter of time before the PV industry takes off as well. Based upon today's stock performances, it seems Wall Street agrees.

Check back with RenewableEnergyWorld.com in the coming days for more on the new subsidy levels in China and what it could mean for renewable energy projects.

Visit our Finance section to find out how all of your solar and other renewable energy stocks performed this week.

4 Comments

Adrian Akau
2009-03-29 17:23:46.0

The subsidy is high but can be lowered later on. Since the purpose is to provide stimulus to the PV industry, the manufacturing base will be strengthened. Up until now, the majority of PV in China was for export purposes because the price of PV has been too high for the majority of people. If the government does follow through on the subsidies, the PV industry will then be able to tune its productions to the needs of the Chinese people. This should then create a synergistic effect whereby the increased production will enable manufacturing costs to decrease and more efficient methods to be applied.

China is already producing the best solar water heating systems in the world and spurred on by this successful venture, wishes now to extend their expertise to PV. Backing by the government will permit this to be done. Shipping costs have risen so that the difference in purchase costs by the time panels reach the US are nearly the same as products produced in the US so the sales are adversely affected, especially during this time of economic problems. The Chinese government has sufficient wisdom to understand that the increase of PV manufacturing directed within their own country will best benefit their own PV industry and nation.

China used to depend even on wind energy expertise from other nations but now is standing on its own two feet. The same needs to be done with PV but the industry must first be strengthened internally and this is the purpose of the stimulus incentives. It may look like they are giving away money, but they have a specific industrial development goal in mind.

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