Beijing said other costs associated with the projects will be covered by a subsidy of 4 to 6 yuan ($.60 to $.90) per watt of generating capacity.
All told, and in concert with other measures, China expects to increase its installed capacity of solar generation from 2,000 megawatts by 2011 and to 20,000 megawatts by 2020. Chinese officials previously said they want at least 15 percent of the nation’s power to come from renewable sources by then.
The announcements came amid global talks in Cancun, Mexico, and at a critical time for China’s renewable energy sector. Currently, about 98 percent of the nation’s solar photovoltaic products are sold on the export market, so manufacturers in the sector have felt the sting of euro depreciation this year.
At the same time, China and the US are at loggerheads over perceived Chinese clean energy trade barriers, particularly in regard to the solar and wind power sectors.
The US is currently investigating a complaint by the United Steelworkers union that says subsidized Chinese producers sell equipment at unfairly low prices, destroying American jobs.
If the Obama Administration agrees with the complaint, which has been pending since September, it could request permission from the World Trade Organization to sanction Chinese goods.
Under the new plan, savings on Chinese solar projects are expected to be considerable. Presently, solar generating capacity in China is estimated to cost between 20,000 and 30,000 yuan ($2,900 and $4,400) per kilowatt-hour – as much as seven times higher than the price of coal-fired power.
Beijing’s embrace of solar power comes after years of promoting domestic wind and hydroelectric dam projects. Last year China announced an initiative, Golden Sun, to promote domestic use of solar power.
Shares of many Chinese solar companies rose considerably in the wake of the subsidies announcement, according to published reports.
Among the biggest winners was solar cell parts maker Solargiga Energy Holdings Ltd., whose stock rose 15 percent in Hong Kong trading. Also doing well where shares in GCL-Poly Poly Energy Holdings Ltd., China’s biggest producer of polysilicon, which gained 2.4 percent. Shares in China Solar Energy Holdings Ltd. advanced 3.2 percent, the Xinhua News Agency reported.
Other winners on the market included Suntech Power Holdings Co., Yingli Green Energy Holding Co. and JA Solar Holdings Co.
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