China ramps up financial supports for solar companies to accelerate deployment

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A suite of financial incentives to help solar developers and manufacturers has been unveiled by the People’s Bank of China. Image: Fotopedia.

China is to ramp up its support of domestic solar companies in a bid to fast-track development in the country.

The country’s People’s Bank of China has confirmed in a statement a suite of new measures comprising financial supports for companies involved in the development of solar and wind  deployment, designed to promote the “rapid development” of new projects in China.

It follows a statement issued by Chinese President Xi Jinping earlier this month which stated that the country’s energy structure, currently “dominated by fossil fuels”, must adjust to a system more optimised for clean power. To achieve this, Jinping called for the “vigorous” development of new renewables and stated that a new series of policies and measures would be unveiled to accelerate deployment.

The new strategy for energy security, the bank said, builds on China’s wider goal, established within its 14th Five Year Plan, to achieve peak carbon emissions by 2030 en route to attaining net zero status by 2060.

The financial supports outlined include the extension or renewal of loans to renewables companies identified as having short-term financial pressures, but with long-term profit potential, while subsidised loans for project developers included on the country’s subsidy list will also be forthcoming.

Further measures outlined by the bank include a commitment to use “all relevant powers” to ensure offtakers pay renewable energy tariff surcharges in full, while local government will not be able to reduce or offer exemptions from the surcharges.

Solar deployment in China is tipped to soar this year as the country doubles down on its renewables strategy. With deployment forecasts for 2020 hovering around the 50GW market, China’s solar deployment figure for 2021 is widely anticipated to reach the 70GW mark, with most analyst forecasts falling in the 65 – 75GW range.

Domestic solar manufacturers would also seem to be expecting a rush of installations throughout 2021 and beyond, with tens of gigawatts of new manufacturing capacity – from polysilicon to cells, wafers and module assembly – set to come onstream over the course of the year.

The Chinese government has also moved to ease supply chain constraints relating to raw materials, lifting restrictions on the manufacture of solar-grade glass to address a shortage which module manufacturers said was “out of control” at the end of last year.

Raw material shortages are, however, still a prevalent issue in the country and have been blamed for a recent increase in module prices witnessed in the country, one which is widely anticipated to spread to international markets shortly.

Additional reporting by Carrie Xiao.

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