Beijing to raise rooftop solar power subsidies by up to 55pc

New state policy aims to relieve financial difficulties holding back rooftop installations

PUBLISHED : Tuesday, 08 July, 2014, 1:54am
UPDATED : Tuesday, 08 July, 2014, 1:54am


Beijing plans to increase the subsidy on power sales by rooftop solar farm developers to state-owned power distributors by up to 55 per cent, and compel the latter to act as an agent for collecting power bills if the developers directly sell to local customers.

The consensus plan was reached after a meeting two weeks ago among state-backed financial institutions, bank regulators and the National Energy Administration (NEA).

It is aimed at relieving financing difficulties that have hindered installations, and is pending final approval by Beijing, United Photovoltaics Group chief project officer Zou Deyu told a media teleconference.

"The top energy and financial authorities have agreed to the plan, but we are still waiting for the policy documents which are expected to come out soon," Zou said. United, which posted a 50 per cent rise in second-quarter power output from the first quarter, is a Hong Kong-listed unit of state-backed ports-to-property conglomerate China Merchants Group.

Currently, rooftop projects are entitled to a state subsidy of 42 fen (53 HK cents) per kilo-watt-hour (kWh) of output, on top of whatever prices developers manage to get from end-users. These are typically factories in buildings atop which solar farms are built.

If the developers fail to sell all of their output to local users, local power grid operators are obliged to buy the remainder at prices that typically vary from 35 fen to 45 fen per kWh.

Zou said the new policy will allow the rooftop projects developers to receive a total revenue of 95 fen to one yuan per kWh, matching that of ground-mounted projects. This means the rooftop subsidy could rise by 31 to 55 per cent from the current 42 fen, sharply boosting their viability.

The NEA has set a 14GW target for installations of solar farms this year, up from 12.9GW last year. Some 8GW of the target is for rooftop projects, and 6GW for ground-mounted ones, mostly in remote areas.

However, less than 2GW of rooftop projects were installed in the first five months of this year as banks were reluctant to lend owing to difficulty in getting long-term obligations from local end-users.

To address this, Zou said Beijing plans to compel local grid firms to provide the commitment and act as the collection agent in exchange for a fee.