China Boosts Subsidy-Eligible Solar Projects by 13% in 2020

(Bloomberg) -- China, the world’s biggest solar market, plans to subsidize 434 photovoltaic power projects with a combined capacity of almost 26 gigawatts of this year.

Shares of solar equipment manufacturers gained as the announcement from the National Energy Administration boosted subsidy-eligible solar projects over the 23 gigawatts approved last year. The increase comes even as China has been pushing subsidy-free solar projects to allow such clean energy to directly compete with coal power.

The projects, located in 15 regions, include 25.6 gigawatts of utility-scale ground-mounted plants, with the rest for smaller projects at industrial and commercial sites, the NEA said in a statement dated June 23 and posted online Sunday.

The scale is “within expectations” after the nation announced earlier this year it will allocate 1 billion yuan ($141 million) of financial support for large solar projects, according to Jonathan Luan, a Beijing-based analyst at BloombergNEF. He expects China to add about 37 gigawatts of solar power in 2020, including some zero-subsidy projects and plants that were approved but not commissioned last year.

Projects that fail to meet a proposed deadline for grid connection by the end of the year will have their power prices cut by 0.01 yuan a kilowatt-hour for every quarter that they are overdue, the NEA said. Subsidies will be canceled for projects that are not completed and connected to the grid two quarters after the proposed deadline.

LONGi Green Energy Technology Co. shares rose 6.1% in Shanghai while the Shanghai Composite Index fell 0.6%. Tongwei Co. rose 1.2% and Trina Solar Co. gained 2.5%. China’s factories dominate the entire solar manufacturing chain, and have been announcing aggressive expansion plans this year.

©2020 Bloomberg L.P.

With assistance from Bloomberg