China sees the light with solar subsidy for large systems

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The Chinese Treasury department has reviewed its solar program with the introduction of a new solar PV subsidy program. The move, which is a temporary measure, according to Barclays Capital Solar Energy, will offer 20RMB per Watt (~$2.90/W) incentives for systems of output greater than 50kW. The uncapped plan could prove to be a huge boon for Chinese solar companies such as Suntech, Yingli, Trina Solar and JA Solar.

China’s potential for growth in the market has risen with this news, given its significantly larger domestic manufacturing footprint and the obvious support from the government.

The Barclays report cites some projected figures for China’s market demand for the next four years:

“Our estimates currently assume 58MW/104MW/166MW/232MW demand from China in 2009/10/11/12 respectively. We believe meaningful upside potential exists if government support for domestic solar sector continues. We believe potential for ~200MW incremental demand impact exists from 2H09.”
 
The Barclays report also referred to a domestic incentive program, which will see the Treasury spur on the use of solar panels on roofs – most likely for both typical solar modules and BIPV. Further details on this aspect of the news are currently unavailable.

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