China, forecast to become the biggest solar market this year, may restructure its subsidies to favor smaller projects over larger ones to promote new plants in in areas with power shortages, an industry official said.
A new policy may abolish one-time subsidies, Meng Xiangan, vice chairman of the China Renewable Energy Society in Beijing, said in an interview. At the same time, a separate subsidy based on power production would be extended to low-voltage plants that don’t typically supply utilities, he said. Meng’s organization acts as a liaison between the government and industry.
Should the government confirm the move, incentives under the Golden Sun program would shrink just as China calls on developers to install more photovoltaic devices than any other country. Its manufacturers already are hurting. Suntech Power Holdings Co., the world’s biggest solar-panel maker in 2011, has become unprofitable and stopped paying on its bonds last week.
“The wave of solar industry consolidation that’s hit Europe and the U.S. is coming to China,” said Nathanael Greene, director of renewable energy policy at the Natural Resources Defense Council in New York. “China’s manufacturers are counting on domestic market growth this year, so major cuts in incentives could really hurt.”
The government picked hundreds of developers last year, including Yingli Green Energy Holding Co. and Trina Solar Ltd., to get subsidies as demand for their solar devices slumped in Europe. Meng didn’t mention names of companies that could be most affected by a policy change.