China Announces Incentive Reform

According to media reports the Ministry of Finance in China has decided to cut incentives for PV installations. Grid connected installations were part of the government's Golden Sun program and the decision has been reached to reduce the tariff to 8 yuan a watt for projects approved last year and 7 yuan for projects that can be completed by the end of this year. This is a 11% drop from current offerings.

The Ministry cited multiple reasons for the decision including the oversupply of product in China as well as a decline in key markets. Another factor was a decline in component costs cutting profit margins and forcing some companies to run at a loss.

Unlike other countries recently changing their subsidies, the Chinese government have offered a clear path for those worse affected. Companies who find the going to tough in the new subsidy range can apply to have projects or amended if they cannot survive under the new proposal.

This does not affect off-grid projects and the government has said that any changes here will be made at a later date. With such a vast amount of the country still relatively isolated the off grid projects are key to the governments future plans.