Solar Energy in China – New Subsidies More Posturing for Cancun than Game Changing

China announced new Solar Subsidies which would boost Solar Demand in China to 1 GW from 2012.The Government would also give around 4-6 yuan in subsidies per watt of solar equipment.13 zones have also been earmarked for constructing projects which would utilize solar panels.The People’s Daily Headline says that China will invest Billions in Solar Power Infrastructure but their are few game changing announcements.The Initiative which is being led by 4 Ministries seems more like posturing for the Cancun  Climate Change Meet than any real push for increasing Solar Energy in China.

Note China has not passed a solar feed in tariff despite expectations amongst solar companies for a long time.China is a solar equipment leader with 60% of Solar Panel Production taking place in China.However 98% of the panels are exported making trading partners angry.High cost Europeans and Japanese companies have been almost driven away from the global solar market unable to compete with the Chinese solar majors.Solar Energy Demand in China is still minuscule compared to the world.Soaring Coal Prices,insufficient energy supply and carbon emissions have made China think of investing a trillion  dollars into green industry.Solar however has not found sufficient love despite 280 MW national auction for solar projects.Wind Energy has grown exponentially in China and now accounts for 50% of the world demand.If the same thing were to happen to Solar Energy,the China’s Solar Demand would grow by 20 times.

China to invest billions in solar power infrastructure

On Dec. 2 in Beijing the Chinese government declared a strategy of promoting solar photovoltaic power generation across the country through various demonstration projects, which coincides with the U.N. Climate Change Conference in Cancún, Mexico.

The initiative is sponsored by four departments: the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Housing and Urban-Rural Development and the National Energy Administration.

Thirteen development zones around the country have been recognized as the first demonstration projects for the solar power generation. Zhang Shaochun, vice minister of finance, said that the effect of the existing demonstration projects, which was put into operation in 2009 and 2010, would be further exploited so that the application would reach at least 1,000 megawatts annually since 2012. A stable solar power market will be in place and expand as a result.

One of the 13 new projects for solar power generation will be located in Yizhuang, Beijing. With an investment of 460 million yuan, it will boast 20-megawatt installed capacity and be deployed on the roofs of buildings.

The Chinese government will give more support to the demonstration projects. A 50 percent subsidy will be granted to suppliers of key equipment who win the bidding. An additional subsidy of 4 yuan per watt and 6 yuan per watt will be given depending on different projects.