China has unveiled a new subsidy program that is sending shares of companies like JA Solar (JASO), Suntech Power (STP) and Yingli Green Energy (YGE) soaring.
Reuters has the full details of the package, which is expected to make China a leader in solar installations:
The Ministry of Finance said the government will subsidise 50 per cent of investment for solar power projects as well as relevant power transmission and distribution systems that connect to grid networks.
For independent photovoltaic power generating systems in remote regions that have no power supply, the subsidy will rise to 70 per cent, the ministry said in an announcement on its website (www.mof.gov.cn).
Grid companies are required to buy all surplus electricity output from solar power projects that generate primarily for the developers’ own needs, at similar rates to benchmark on-grid tariffs set for coal-fired power generators.
To qualify for the subsidy, in addition to other requirements, each project must have a generating capacity of at least 300 kilowatt peak, while construction will have to be completed in one year and operations will have to last for at least 20 years.
The government plans to install more than 500 megawatts of solar power pilot projects in two to three years. But the total generating capacity in such pilot projects in each province in principle should not exceed 20 megawatts, the ministry said.
In March, the Finance Ministry said it would provide 20 yuan per watt peak (Wp) of subsidy for projects attached to buildings that have capacity of more than 50 kilowatt peak, which could cut the power generating cost by around half to about 1 yuan per kilowatt-hour.
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