(Yicai Global) June 4 -- China plans to cut solar feed-in subsidies and build less photovoltaic power plants this year as it looks to cut electricity prices by 10 percent.
The move would cut subsidies by CNY0.05 (less than one American cent) per kilowatt-hour, leaving feed-in tariffs at between CNY0.5 (USD0.08) and CNY0.7, the Global Times reported. The National Development and Reform Commission, Ministry of Finance and National Energy Administration announced the change on June 1, but won't amend the rate for county-level poverty alleviation projects.
"This year's government work report clearly stipulated that 2018 electricity prices will be lowered. But the PV subsidy comes from continuous hiking of electricity prices in the past, which was paid for by ordinary consumers," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University. In order to cut prices, the subsidies need to be scaled back, he added.
China's solar power generation jumped 64 percent to more than 35 billion kilowatt-hours in the first quarter, according to data from the NDRC, the nation's top price setter and economic planner. The country is the largest renewable energy generator worldwide, and has plans to produce 27 percent of its energy from green sources within the next two or so years, according to its five-year plan through 2020.
The domestic market surplus will push upstream firms to look for overseas opportunities, Lin added, saying that given obstacles in Europe and the United States, Africa and other regions along the Belt and Road initiative could be top targets.
Chinese President Xi Jinping devised the Belt and Road in 2013. It is a grand plan spanning 30 to 40 years and calls for a vast infrastructure and trade route encompassing roads, rails, ports and pipelines in Asia, Europe, Africa and South America.
Editor: James Boynton