China's solar incentive reportedly may face a significant cut under new energy subsidy policies in order to encourage market mechanism in the industry.
The subsidy for standalone solar PV systems for self-use has been generally expected at CNY0.4-0.6/kWh (US$0.06-0.09/kWh), but it may turn out to be only CNY0.35/kWh under the new policies, according to media reports.
Taiwan-based firms noted incentive cuts are expected. Countries such as Germany and Italy have been lowering feed-in-tariffs (FITs) to increase market competition.
Due to the anti-dumping and anti-subsidy probe in Europe, China-based firms have been shifting focus on domestic demand as the government recently set the 2013 installation target to 10GW. However, the speculation of an incentive cut is likely to push back demand in China.
Market observers noted that incentive cuts in China are unlikely to affect Taiwan-based firms because due to Europe's antitrust investigation, China-based firms have been transferring to orders from Europe- and US-based customers to Taiwan-based peers.
Taiwan-based solar wafer firms added that a new type of cooperation between Taiwan- and China-based solar firms is emerging. The firms noted that recently more China-based solar module firms have issued orders to Taiwan-based solar wafer makers, which in turn help seek solar cell partners for the China module firms. This type of cooperation did not exist before, said solar wafer firms.
