Government struggling to pay Chinese solar subsidies
BEIJING, Sept 30 (Reuters) – China has proposed a cut of as much as 40 percent in subsidies for solar projects, the Shanghai Securities Times reported on Friday, renewing concerns about waning state support for clean power after years of rapid investment in capacity.
A draft document reviewed by the paper, showed the country’s top economic planner, the National Development and Reform Commission (NDRC), is considering slashing the subsidy to 20 cents per kilowatt-hour (kWh) from 42 cents now.
Shares of Hong Kong-listed Chinese renewable energy companies fell after the report, including China Longyuan Power Group, down as much as 10 percent, and Xinjiang Goldwind Science and Technology, down 4 percent at one point.
The NDRC is also looking at cutting nationwide grid solar power prices, or the amount that grid operators pay solar generators for power. In western provinces such as Xinjiang and Gansu, China will cut the grid prices to 55 cents per kWh from 80 cents.
The NDRC is also considering to set offshore wind power grid prices at 80 cents per kWh for coastal wind mills and at 70 cents per kWh for tidal wind mills, website sina.com reported, citing NDRC documents posted by renewable energy news website Sinoenergy.
The document comes after a warning this month by the NDRC that the government was struggling to pay billions of yuan in subsidies to renewable power companies.
Developers face a possible shortfall of 60 billion yuan ($9 billion) in subsidy payments this year owed to them by the government.
The state planner is seeking comment from the industry but could introduce the new prices and subsidy standards as early as Jan. 1 next year.
The NDRC did not immediately respond to a Reuters request for comment on the draft.
(Reporting by Meng Meng and Josephine Mason; Editing by Christian Schmollinger)