China’s subsidies plan: update suggests decline in annual allowance

Following on from last week’s news of the introduction of a solar subsidy system for the Chinese market, Barclays Capital Solar has published an update, with details garnered from the Chinese Ministry of Finance’s announcement on March 31st. The reviewed announcement includes news of an annual decline in subsidies.

The Barclays report states that contrary to the original release, the program covers both non-BIPV rooftop applications as well as BIPV, but that the incentive for the non-BIPV applications will be lower than the $2.90/W announced for BIPV.

The subsidy amounts are expected to decline year-by-year, but no further information was given on this point.

While the Ministry of Finance has yet to decide on a specific annual cap for the subsidies, it was suggested that 70% of the incentives budget would be transferred to the Provincial Finance Ministry. Following a review of the finished package, the remaining 30% will then be transferred to the Ministry.

It seems likely that this program is in addition to Provincial Subsidy programs for the country, given that, for example, the province of Jiangsau recently established a feed-in tariff for 240MW installations.
 
Stimulus package

China’s 4 trillion yuan stimulus package (announced in early March) included 210 billion yuan ($30 billion) for green energy programs, but there are rumours that there is an additional $30 billion green stimulus package on the cards – this has been disputed by Barclays’s research.

Outlook

Despite the lower subsidy level for the non-BIPV installations, the Barclays report states that:

“…We believe no formal cap for the program, potential announcements of provincial subsidy programs and longer term nature of the Central government subsidy program are positives.”