China has announced its first nationwide feed-in tariff for solar projects in a step that underscores the determination of the world’s biggest energy user to move toward renewable energy.
Beijing has made renewable energy a keystone of its energy policy and aims to raise solar power capacity tenfold in the next five years. The long-awaited feed-in tariff guarantees solar developers a payment of Rmb1 per kilowatt-hour that their projects feed into the grid, or Rmb1.15 per kh in some cases depending on the timing and location of the project.
At a time of slowing global demand as big markets such as Germany and Italy reduce subsidies for solar panels, Beijing’s increasing support will see the country – already the world’s largest maker of solar panels – become one of the world’s biggest buyers of solar panels in coming years, according to analysts and industry executives.
At the headquarters of Yingli in Baoding, outside Beijing, developers are busy designing products to suit the Chinese market – including solar tents for the Chinese military, and solar panels that fit on yaks’ backs for Tibetan herders. Last year the Chinese market accounted for just five per cent of the company’s sales, but that figure could double by next year, according to company statements.
While analysts disagree on how profitable Chinese solar projects will be under the new tariff, the announcement is widely seen as an affirmation of Beijing’s intent to support the solar industry. A similar tariff has been in place for wind projects since 2009, propelling China to become the world’s biggest wind farm operator. Industry executives said that many Chinese solar developers had already been setting up projects this year in anticipation of a good tariff coming through.