China Government Will Unify Its Feed-in-Tariffs for Solar Power

The China government announced recently it will unify its feed-in-tariffs for solar power to promote the development of the domestic solar market. The feed-in-tariff for solar power systems which began construction in July 2011 and are able to be completed by end of the year will be CNY1.15 (US$0.18) per KWh. The feed-in-tariff for solar power systems that have been admitted but not able to be completed by end of 2011 will be CNY1/KWh (except in Tibet, which is CNY1.15/KWh). Industry sources stated that China's incentive program cannot subsidize every household and business like the policies in Europe. The central government has to control part of the subsidies and have local governments subsidize projects. The unification of feed-in-tariff rates will decrease the level of difficulty in calculating solar power system investment costs and hopefully will effectively increase domestic demand, added industry sources. The solar industry in China has been subject to international debate as the government has been heavily subsidizing firms enabling them to gain market share through price competition. Firms from Europe and the US have been lobbying governments to prevent the dumping of China-based solar products. China's domestic demand for solar has been lagging behind despite the continuous capacity expansions made by solar firms. The domestic solar market in China has been estimated to have installation demand around 1GW in 2011, with 800MW in Qinghai. Source: www.digitimes.com