Beijing's tariff move takes shine off solar stocks
Concerns grow over returns on solar projects as Beijing plans to cut charges
Solar stocks fell after a media report said Beijing planned to reduce power tariffs it allowed solar farms to charge, raising concerns that it might be more inclined to drive equipment makers to cut costs and consolidate than boost demand through incentives.
Beijing planned to allow solar farms in the Xinjiang Uygur autonomous region to collect up to 85 fen (HK$1.05) per kilowatt-hour (kWh) from power distributors, the Shanghai Securities News reported, citing a consultation paper to be circulated to the industry.
Operators in other sunshine-rich regions like Gansu, Qinghai, Ningxia and Inner Mongolia would be given a top power tariff of 75 to 85 fen per kWh, while those in Tibet could charge up to 95 fen, it added. The top price in all other regions is one yuan.
Currently, Beijing gives an on-grid tariff of one yuan per kWh for solar power projects in all regions, although some local governments give extra subsidies.
Shares in China Singyes Solar Technologies, which installs off-grid systems for solar project owners, fell 16.8 per cent to HK$8.05. Even so, they remain up by 78 per cent over the past year on optimism that the firm would benefit from government incentives to spur solar power demand.
GCL-Poly Energy, the world's largest maker of raw materials for solar panels, fell 3.8 per cent to HK$2.04.